What Is ChatGPT, and How Does It Make Money?

ChatGPT, the free chatbot released in November 2022 by artificial intelligence (AI) research company OpenAI, has taken the internet by storm. In its first months of existence, ChatGPT inspired users to imagine a host of use cases for the model, including using ChatGPT to negotiate parking tickets, make workout plans, and even create bedtime stories for children. Some artificial intelligence experts believe that ChatGPT could revolutionize both the way that humans interact with chatbots and AI more broadly.

Below, we explore this new technology and how it could eventually make money.

What Is ChatGPT?

Put simply, ChatGPT is an AI model that engages in conversational dialogue. It is an example of a chatbot, akin to the automated chat services found on some companies’ customer service websites. It was developed by OpenAI, a tech research company dedicated to ensuring that artificial intelligence benefits all of humanity.

 The “GPT” in ChatGPT refers to “Generative Pre-training Transformer,” referring to the way that ChatGPT processes language.

Benefits of ChatGPT

As mentioned, there are numerous potential uses for ChatGPT. They range from more direct, chatbot-type functions to much more obscure applications, and it is likely that users will explore a host of other possible ways to utilize this technology in the future, including in search engines.

Disadvantages of ChatGPT

OpenAI lists some of the limitations of ChatGPT as it currently exists in its presentation of the model. These include that ChatGPT sometimes writes coherent but incorrect statements, that it makes assumptions about ambiguous queries, and that the model tends to be excessively verbose, among similar concerns.

How Does ChatGPT Make Money?

OpenAI, the company that created ChatGPT, has not yet monetized ChatGPT on a wide scale. As of Jan. 11, 2023, ChatGPT was free to use through the OpenAI website. However, the company does sell the application programming interface on a subscription basis to organizations looking to use the model for their own purposes, according to Investopedia’s query to ChatGPT itself.

In mid-January 2023, OpenAI announced that it planned to launch a paid version of ChatGPT called ChatGPT Professional. The paid iteration of the model will reportedly include benefits such as no blackout windows, an unlimited number of messages with the bot, and similar perks.

The viral success of ChatGPT could be worth a huge amount to OpenAI, which was co-founded by Elon Musk. Within a week of its launch, the model had gained one million users. And two months after ChatGPT was released, OpenAI raised the possibility of selling existing shares in a tender offer that would place the value of the company at about $29 billion, making it among the most valuable startups. Microsoft Corp. (MSFT) may invest $10 billion in OpenAI as it intends to use ChatGPT to bolster its Bing search engine.

About E. J. McKay

E.J.McKay is a Shanghai-headquartered investment bank with a special focus on mergers & acquisitions. We are one of the most long standing independent investment banks in China, with core business of mergers & acquisitions and financing advisory.