OpenAI has significantly improved the profit margins on its paid products this year, even as the company struggles to turn an overall profit. The ChatGPT creator now retains 70 percent of revenue after covering the computing costs for paying customers, according to a report in The Information.
Mark Bergen reports for Bloomberg that OpenAI’s “compute margin” stood at 52 percent at the end of 2024 and just 35 percent in January 2024. The metric measures the share of revenue remaining after paying for the computational power needed to run AI models for corporate and consumer subscribers. An OpenAI spokesperson declined to confirm the figures.
The improvement comes as OpenAI faces mounting pressure to demonstrate financial viability. The company, valued at $500 billion in October, has not yet posted a profit despite setting off the modern artificial intelligence boom. High computing costs and ambitious infrastructure plans continue to strain its finances.
Competition has also intensified. CEO Sam Altman recently declared a “code red” after Google’s Gemini model outperformed OpenAI’s offerings on industry benchmarks. The company redirected internal resources to improve ChatGPT and delayed plans for an advertising service.
Most ChatGPT users still rely on the free version. OpenAI is pushing its business products and specialized software for industries like financial services and education, where it competes with Google and Anthropic.
The Information reports that OpenAI maintains better compute margins than Anthropic for paid accounts, though Anthropic demonstrates superior overall server spending efficiency.
