ChatGPT Subscription Costs Could Surge to $2,000 Per Month, Rumors Suggest

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TheGen.AI News

ChatGPT Subscription Costs Could Surge to $2,000 Per Month, Rumors Suggest

OpenAI, the company behind ChatGPT, is reportedly considering a significant increase in its subscription prices. Currently, the ChatGPT Plus plan costs $20 per month, offering benefits like priority access to new tools, custom GPTs, and DALL-E 3 image generation. However, rumors suggest the price could rise drastically, with some speculating it may go as high as $2,000 per month.

It’s unclear whether this price hike would affect the existing ChatGPT Plus service or apply only to new models, such as the one codenamed “Strawberry.” Not much is known about Strawberry, but it is expected to have enhanced reasoning capabilities for more complex tasks. OpenAI is also reportedly using a post-training method, allowing its AI models to continue improving based on user feedback after their initial training, according to a report from Windows Central.

The potential price increase comes after OpenAI surpassed a major milestone, reaching over 1 million paid business users. Additionally, ChatGPT’s daily active users exceeded 200 million last week, partly due to the release of GPT-4o. Despite these achievements, the news of a possible price hike has sparked mixed reactions on social media. Some users have voiced concerns, with one Reddit user suggesting that such a steep price would only be justified for something nearing true artificial general intelligence (AGI).

OpenAI's financial difficulties are also contributing to this potential move. Reports indicate that the company could face losses of up to $5 billion over the next year. Operating ChatGPT alone costs OpenAI as much as $700,000 daily, not including the substantial energy demands of AI technologies. Despite these challenges, OpenAI is expected to receive additional funding from key supporters like Microsoft and NVIDIA, potentially raising its market valuation to $100 billion. As AI remains a top priority for major tech companies, OpenAI is under pressure to secure a sustainable financial future while staying competitive in the rapidly evolving industry.

Oracle Poised to Become the 'Data Broker' for Generative AI, Analyst Predicts

Oracle's stock is climbing following its strong first-quarter results and new partnerships with tech giants Amazon and Google. Patrick Moorhead, founder of Moor Insights & Strategy, highlights the significance of these developments, especially the partnership with Amazon Web Services (AWS), noting that it’s a major shift given the companies’ long-standing rivalry. He emphasizes that Oracle's database is thriving, with strong demand from enterprise customers who aren’t likely to abandon it for cloud-based alternatives.

Moorhead believes the stock surge is well-deserved, citing the resolution of the long-standing tension between Oracle and traditional cloud providers. He points out that Oracle is unique in its focus on commercial customers, unlike Amazon, which serves both consumer and commercial sectors. Oracle's strength lies in securing large enterprises and government clients requiring high security and regulated environments.

He identifies three key areas where Oracle excels: Oracle Cloud Infrastructure (OCI), its SaaS offerings, and its broader commercial business. As AI becomes increasingly important, Moorhead sees Oracle playing a critical role in managing enterprise data, which he believes is the biggest hurdle in adopting AI. Oracle’s ability to manage and secure data positions it as a leader in the generative AI space, acting as the "data broker" for enterprises in this new age.

Can Google Survive the Gen AI Wave? The Future of Search in Question

For more than 20 years, Google has dominated the online search landscape, building a $175 billion enterprise that is central to the internet. With around 90% control of the global search market, Google now faces its toughest challenge yet due to the rise of generative AI and chatbots, like OpenAI’s SearchGPT. This technological shift is putting enormous pressure on Google to adapt or risk losing its dominance.

Microsoft's $13 billion investment in OpenAI and Apple’s integration of ChatGPT into Siri pose significant threats to Google’s leadership in search, forcing the company to take decisive action to maintain its market position.

Google's success has long been attributed to its easy-to-use design and powerful algorithms, which simplified information retrieval compared to competitors like Yahoo. By efficiently organizing vast amounts of data, Google became the default search engine for most users.

However, with the emergence of generative AI technologies, Google's traditional search model is starting to show its age. AI tools now offer users direct answers to their queries, eliminating the need to sort through numerous links—a hallmark of traditional search engines.

This shift in user preferences represents a major threat to Google's established model. What was once its greatest strength—simplicity—has become a vulnerability as AI platforms revolutionize how users seek information.

New competitors, such as Perplexity, a startup valued at $1 billion and backed by Jeff Bezos, are gaining traction. These AI-driven platforms provide a more streamlined experience by delivering direct answers rather than lists of links, potentially drawing users away from Google’s traditional search. The growing presence of ads on Google’s search results further complicates the user experience, making alternatives more attractive. This evolution threatens Google's core business model, which heavily relies on advertising revenue.

In the second quarter alone, Google Search generated $48.5 billion of Alphabet's total $84.7 billion in revenue.

In addition, licensing agreements between OpenAI and major publishers like the Financial Times and Associated Press could limit the availability of content on Google, further eroding its dominance. Google's strained relationship with content creators, who have long been frustrated with how their content is used, could drive users elsewhere if AI platforms secure exclusive deals, diminishing Google’s value.

Despite these challenges, Google has taken a cautious approach to generative AI. While it has started incorporating AI features, such as AI-generated summaries at the top of search results, critics argue that Google’s efforts to protect its search and ad monopoly have led to a conservative AI development strategy.

Google’s search business remains highly profitable, and the company seems reluctant to risk that by making aggressive changes.

One key question is whether Google should follow OpenAI’s lead by striking more licensing deals with publishers. However, such agreements could come with significant costs. In 2020, Google committed to paying news providers $1 billion over three years, and potential expenses related to copyright issues could further strain its finances.

On the hardware side, Google has an advantage with its new Pixel 9 smartphones, which feature Gemini, the company's personal AI assistant. This integration demonstrates how Google can embed AI across its devices, potentially setting new standards for Android manufacturers like Samsung and Xiaomi.

Meanwhile, Apple has developed its own AI model, Apple Intelligence, which prioritizes user privacy and operates on devices rather than through the cloud.

For Google to fully harness its AI capabilities, it must address internal organizational challenges. While its culture of autonomy has been a strength, it may also hinder the company from executing a cohesive strategy. CEO Sundar Pichai must unite teams across search, computing platforms, and AI under a common vision.

Google’s ability to innovate will be crucial, especially as voice search becomes more prominent. Users increasingly seek faster, more intuitive ways to find information, and voice search offers a natural way to do so. As smart speakers and AI-powered smartphones grow in popularity, Google must ensure it stays ahead of these trends.

Icra Predicts Growth in Indian IT Companies' Gen-AI Deals Over Medium Term

While the current revenue contribution from Generative AI (Gen AI) deals for IT services companies is limited, the rating agency Icra expects it to increase in the medium term as technology adoption grows.

"Greater adoption of Gen AI is a key industry metric to watch over the medium to long term. Leading Indian IT companies have already trained a significant portion of their workforce in Gen AI skills and are expanding their capabilities and service offerings to deliver AI-based solutions to clients," Icra noted.

Tata Consultancy Services (TCS), India’s largest IT services company, saw its AI and Gen AI project pipeline double to $1.5 billion in the first quarter. During TCS's first-quarter earnings call, CEO and MD K Krithivasan stated, "We are also exploring ways to enhance productivity and other efficiencies through Generative AI. Clients are looking at Gen AI as a key tool to improve delivery in terms of cycle time, cost, or quality."

In 2023–24, TCS trained 350,000 employees in AI, while Wipro trained 220,000 employees in the same area.

Icra expects the Indian IT services sector to experience a second consecutive year of modest revenue growth, projected at 4-6% for FY2025. The agency also forecasts that the industry’s operating profit margin (OPM) will remain healthy at 22%, with attrition rates having significantly declined and expected to stabilize in the near future.

Deepak Jotwani, Vice President & Sector Head – Corporate Ratings at Icra, commented, "Icra anticipates FY2025 to be another year of subdued revenue growth, estimated at 4-6%, due to reduced discretionary tech spending by clients amid ongoing macroeconomic uncertainties in the US and Europe."

Higher inflation and interest rates have put pressure on clients in key industries, leading to a stronger focus on cost optimization and delaying major discretionary projects. Although revenue conversion has slowed, most IT companies continue to have a robust order book and deal pipeline.

Jotwani added that as macroeconomic challenges ease, clients' growing emphasis on technological investment as part of their capital allocation strategies should help sustain growth momentum in the medium term.

Indian IT companies have experienced sluggish revenue growth over the past five to six quarters, with macroeconomic challenges in key markets posing difficulties. The US generates the largest share of revenue for the industry, followed by Europe and the rest of the world.

Reduced demand and increased utilization of excess manpower added in FY2023 have put pressure on hiring within the IT sector. Although the level of negative net additions decreased significantly in Q1 FY2025, Icra expects hiring to remain subdued until growth picks up. In FY2022 and the first half of FY2023, hiring had reached record highs due to strong demand for digital technologies and elevated attrition rates.

Additionally, attrition rates have steadily declined over the last five quarters. For Icra’s sample set of companies, the last twelve months' (LTM) attrition dropped to 13.1% in Q1 FY2025 from 23.2% in Q2 FY2023, as the slowdown in growth and previous strong hiring corrected the earlier demand-supply imbalance. Jotwani expects attrition to stabilize at around 12-13% for FY2025.

TheOpensource.AI News

Roblox Unveils Open-Source AI for 3D World Creation

Artificial intelligence has become an integral part of our everyday lives, and you’ve likely already used an AI-powered product or service. Similarly, AI has also made its way into video games. A popular example is Cyberpunk 2077, one of my personal favorites, which uses an AI tool called “JALI” to automate facial animations and lip-syncing, creating more realistic interactions with NPCs.

Another game, Roblox, has been utilizing AI tools to enhance productivity and output for some time. At this year’s Roblox Developers Conference (RDC), they unveiled an exciting new feature: an open-source generative AI platform. This platform can transform text prompts into 3D environments. As demonstrated in a video, the AI was able to generate a racetrack with various settings, such as a desert and a forest.

The technology works by "tokenizing" 3D blocks from the many user-created in-game worlds in Roblox, assigning numerical values to them. This allows the AI to predict the next blocks and build 3D environments.

Concerned about potential errors in the output? To address this, a second AI model, trained on 2D data from open-source and licensed datasets, moderates the first model's output.

In an interview with MIT Technology Review, Roblox's VP of Engineering, Growth & AI Platform, Anupam Singh, explained, “We’re making it open source, so anyone, including competitors, can use it. By doing so, we hope to unlock creative possibilities for developers who may not be as skilled at building Roblox environments.”

Interested in trying it out? This foundational model appears promising for creators who want to build game worlds quickly without needing to dive into coding, focusing instead on the creative aspects. As an open-source project, it will be widely accessible, though the code hasn’t been released yet, and it’s unclear what license will be used. My guess is that it will fall under one of the OSI-approved licenses. You can keep an eye on Roblox’s GitHub project page for updates on when it becomes available.

Dell and Red Hat Join Forces to Accelerate Open-Source AI Workloads

Red Hat Enterprise Linux AI (RHEL AI) is an AI-optimized platform designed by Dell Technologies and Red Hat, Inc. to enhance Dell PowerEdge servers. It simplifies the process of developing, testing, and deploying generative AI and machine learning models. As a result, RHEL AI has become the preferred platform for the Dell PowerEdge R760xa server.

This collaboration allows organizations to more easily adopt AI/ML strategies to support enterprise applications and expand their IT systems. By combining optimized AI hardware with the dependable RHEL AI platform on Dell PowerEdge, Dell and Red Hat are offering a more seamless AI experience. RHEL AI continually tests and validates hardware solutions, like NVIDIA's accelerated computing, to improve the overall AI experience for users.

RHEL AI integrates IBM Research's open-source Granite large language models (LLMs) with model alignment tools from InstructLab, which utilize the LAB (Large-scale Alignment for ChatBots) methodology. The community-driven InstructLab project helps in creating models, which are incorporated into Red Hat OpenShift AI—Red Hat's hybrid cloud machine learning operations (MLOps) platform. This allows the models and InstructLab to be deployed at scale across distributed clusters. RHEL AI is available as a bootable, optimized RHEL image for deployment on individual servers within hybrid cloud environments.

TheClosedsource.AI News

Sam Altman Shares Fresh Insight on Product Launches with Dumpster Fire Analogy

OpenAI CEO Sam Altman has plenty of experience with product launches. Under his leadership, OpenAI introduced ChatGPT in November 2022, which quickly gained global popularity and fueled the ongoing AI competition. This success also helped OpenAI become a well-known name in the tech industry.

On Monday, Altman shared his thoughts on product launches in response to a post by an OpenAI employee on X (formerly Twitter). OpenAI technical staff member Nat McAleese had written on Saturday, "OpenAI works miracles, but we also wrap a lot of things in bash while loops to work around periodic crashes."

Altman responded a few days later, comparing the process to launching a product with less-than-ideal conditions. He humorously noted, "If you strap a rocket to a dumpster, the dumpster can still reach orbit, and the fire will go out as it leaves the atmosphere," adding, "But it's better to launch nice satellites instead."

Altman is no stranger to offering advice on social media. He has often shared his insights on tech and leadership via X and his blog.

In December, Altman published a blog post titled "What I Wish Someone Had Told Me," where he offered 17 tips on topics ranging from team management to product execution. He emphasized the value of fast iteration, writing, "It's usually ok to be wrong if you iterate quickly. Plans should be measured in decades, but execution should be measured in weeks."

In April, Altman tweeted about the importance of being a concise communicator, calling it a "big unlock" for him. He advised learning to condense messages that might take others five minutes into 30 seconds. In a follow-up post, Altman described mastering brevity as a "surprisingly learnable skill" and recommended practicing with a friend who is good at rephrasing things concisely. 

Representatives for Altman at OpenAI did not immediately respond to a request for comment outside of regular business hours.

OpenAI’s Role in the AI Device Market Uncertain as Apple Prioritizes Its Own Models

Since reports emerged about Jony Ive and Sam Altman collaborating on an "iPhone for AI," there has been speculation that OpenAI might enter the AI device market.

A year later, AI devices have largely underperformed, and Apple's latest release hints that the company is cautiously integrating AI. Despite Apple Intelligence being a key feature of the new iPhone, the tech giant seems to be proceeding carefully.

Apple's AI Journey  

Unveiled at an Apple event on Sept. 9, the iPhone 16 continues to follow the familiar design of recent models, but its major improvements lie within the device. Reflecting the trend toward more conversational AI-powered assistants, Siri has been revamped to utilize both Apple’s proprietary language models and OpenAI’s GPT-4 for answering queries.

Apple also introduced Visual Intelligence, its response to Google Lens, enabling users to search for information by taking photos. While iOS 18 will bring new capabilities to older iPhones, the iPhone 16’s enhanced Arm chip allows it to handle more advanced on-device AI tasks. Certain features, like Visual Intelligence, will be exclusive to the latest hardware.

A Measured AI Approach  

Apple Intelligence represents the company's most significant effort to bring AI into its flagship phones, but it isn’t rushing to release features. The new Siri is more advanced, yet Apple hasn’t made drastic changes to the user experience. Similarly, while Apple introduced various computer vision capabilities, Visual Intelligence will be released gradually.

In contrast, companies like Google and Samsung are aggressively incorporating AI into their devices. Apple's more restrained approach may be wise, given the backlash Google faced with its smart assistant update. Apple seems focused on refining features carefully before release.

OpenAI Models Take a Backseat 

Although Apple’s partnership with OpenAI gives iPhone users access to GPT and DALL-E models via the cloud, Apple Intelligence primarily relies on its own AI and on-device processing. This strategy aligns with Apple's usual approach, as relying too much on ChatGPT could create long-term dependence on OpenAI. Instead, iPhone 16 defaults to Apple’s AI and only switches to other models when specifically requested by users.

This sidelining of OpenAI models within iOS raises questions about their role in the smartphone ecosystem.

AI Devices and OpenAI  

While ChatGPT apps are available for iPhone and Android, OpenAI's deeper integration with Apple offers more functionality. However, studies show that users rarely change default settings, meaning Apple’s models are unlikely to be overtaken by OpenAI’s.

Additionally, the competitive gap between GPT-4 and rival language models has narrowed, with options from OpenAI, Google, Anthropic, Meta, and others performing similarly. As a result, personal preference and ease of use will likely influence user choices going forward.

Though Apple’s partnership with OpenAI benefits the latter, it doesn’t guarantee ChatGPT’s dominance in smartphone AI.

Looking ahead, OpenAI CEO Sam Altman believes that future AI services won’t be delivered through smartphones. His collaboration with Jony Ive aims to create a more "natural and intuitive" AI interface. However, past attempts to replace smartphones, like Human’s AI pin and Rabbit R1, have faced challenges, mainly because people are not ready to give up their smartphones. And with the iPhone 16 designed to handle AI tasks, the need for a separate AI device is questionable.

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