How Does OpenAI Make Money?

Written by Adam Morris

Updated August 6, 2023

There is curiosity surrounding how OpenAI generates revenue despite their main objective of advancing AI for the greater good of society. Although the company prioritizes creating advanced AI technology, it is unclear how profit fits into their goals.

OpenAI is a non-profit research company established in 2015. It endeavors to create AI systems that are secure and valuable for all. Although OpenAI is a non-profit organization, it has garnered substantial investment and attention from both industry leaders and policymakers.

So how does OpenAI make money? In this article, we will discuss how OpenAI generates revenue to fund its research and ambitious goals, despite their focus on societal benefits rather than profits. It’s worth noting that the company is not entirely self-sustaining.

What Is OpenAI?

The objective of OpenAI, a well-known research and tech company, is to guarantee that the development of artificial general intelligence (AGI) will have positive outcomes for humanity.

Their focus is on academic research as well as creating AI-related products that are driven by their results. OpenAI’s most famous project has been the development of the Generative Pre-trained Transformer (GPT) language model, which serves as the basis for many creations.

OpenAI homepage

The language model has enabled ChatGPT, a chatbot that can answer questions posed by users with remarkable accuracy. OpenAI also licenses their GPT-3 language model and sells it to those who want access to such intricate programming building blocks.

OpenAI is a company that excels in creating the foundational layers for the Artificial Intelligence (AI) industry. They have developed innovative generative models such as GPT-3 and DALL-E, while also enabling startups to create their own applications on top of these models by having access to API.

It offers flexibility to businesses by providing them with a platform that they can customize with their own dataset and AI capabilities. OpenAI further has a freemium model surrounding its ChatGPT technology. Additionally, it has formed commercial partnerships with Microsoft where they jointly enable open source products which are commercially available.

What does OpenAI do?

OpenAI is a company that develops artificial intelligence with the aim of making the technology accessible to everyone for the benefit of humanity. A team of tech experts, including Elon Musk, Sam Altman, and LinkedIn co-founder Reid Hoffman, established the company in 2015.

Their research into artificial intelligence has been gaining recognition in the AI community. OpenAI conducts research in various fields of study such as machine learning, computer vision, and natural language processing.

OpenAI pioneering research on AI technology

In addition to its research activities, OpenAI also offers various products and services such as GPT-3 which is applied for tasks such as text generation and translation. Some of the popular AI software tools that use GPT-3 are Peppertype AI, InkForAll, WriteSonic, and Outranking AI.

OpenAI’s mission is both ambitious and far-reaching. By furthering automation through intelligent technology solutions, the firm seeks to make life easier for people from all walks of life while still protecting user data privacy.

OpenAI is dedicated to working on projects that can help us understand our world better through data analysis and more efficient operations–all with potential applications ranging from motorized wheelchairs to computer diagnostics programs.

Ultimately, OpenAI looks to build an open, secure platform where AI technology can be developed securely while bringing humanity forward.

OpenAI’s Business Model

OpenAI’s business model is a hybrid between a research lab and full-fledged commercial company, with the possible shift towards for-profit seeming to be motivated by the need to attract and retain top talent.

The company was initially founded as an altruistic venture, but has shifted focus towards ‘capped profit’, where profits are not allowed to exceed 100X the investment. This shift has been received with mixed criticism; some argue that OpenAI is drifting away from altruism in favour of money-seeking profiteering.

With the switch to for-profit, OpenAI can now acquire venture capital; this has allowed them to offer employees lofty salaries – even prominent researchers, who can earn up to one million dollars annually.

Therefore, OpenAI’s new business model allows them to finance its operations and attract crucial personnel which may have been unattainable under its previous structure.


OpenAI’s APIs are changing the way businesses apply AI, making it easier for them to access powerful technology to build and deploy new applications.

OpenAI has a three-layered stack of AI, with its middle layer primarily consisting of generative models that can be used to generate text or audio for various applications.

OpenAI API models

These models have now been monetized through OpenAI’s APIs, which let any business access the technology and use it in creative ways to create innovative products. For instance, GitHub Copilot is an example of how developers can use the API to automatically review pull requests and ensure consistency among projects.

At the larger consumer level applications, these OpenAI APIs allow companies to make their products or services smarter by applying AI to them. The API acts as a bridge between existing applications and the knowledge base stored within OpenAI’s ever expanding universe of powerful machine learning models and processes.

By using this bridge, businesses are given an advantage in terms of building efficient and smart services on top of existing ones that leverage machine learning efficiently and effectively. All in all, by providing these powerful APIs OpenAI is paving the way for more sophisticated and useful products based on Artificial Intelligence that will enhance our lives even further.

How Does OpenAI Make Money From Chat GPT?

ChatGPT is OpenAI’s new consumer-focused GPT model that has revolutionized the way users interact with their systems. This conversational interface enables them to have realistic conversations with applications.

Pre-ChatGPT, OpenAI APIs were mainly used for showcasing the capabilities of the models but with ChatGPT they moved to a business model centered around consumers. By leveraging GPT and InstructGPT models in combination, ChatGPT’s user interface continues to grow in sophistication and effectiveness when it comes to complex conversations and tasks.

OpenAIs ChatGPT

Since its launch, ChatGPT has already made its mark in reaching millions of users worldwide and it continues to expand as newer features are being added. The idea behind this model is not only to help people simplify complex operations on websites or other platforms but also help process natural language interactions in an efficient manner.

With natural language processing technologies continuing to evolve at such a rapid pace, OpenAI has definitely taken the right steps by introducing ChatGPTto offer individuals access to real-time conversations whether it’s via text or voice communications.

ChatGPT Premium Subscription

The advantages of ChatGPT’s premium version are clear: it provides users with a faster, more reliable performance that helps to ensure that tasks can be completed with plenty of tokens.

The functionalities are exactly the same as the free version, so users won’t have to worry about learning new systems or commands. The main distinction between the two versions is their speed and performance. By opting for the premium version, users can be confident that their tasks will be completed promptly and adeptly.

At a cost of only $20/mo, ChatGPT Premium offers great value for money; not only will your tasks be handled swiftly, but you’ll also benefit from taking advantage of having tasks completed without specific limits on how many tokens they require.

So no matter how lengthy or complicated your task may be, you can rest assured that it’s going to get done in a timely fashion when you purchase ChatGPT Premium.


The ChatGPT API makes it easy to integrate OpenAI’s conversational AI into any web application. The ChatGPT model family’s release of gpt-3.5-turbo is the same model used in the ChatGPT product, and at only 0.002 per 1000 tokens, is 10x cheaper than our existing GPT-3.5 models.

OpenAI's GPT3.5 turbo

It has been noted that many non-chat use cases have seen success with gpt-3.5-turbo with just a slight adjustment of their prompts. In its documentation, OpenAI explains that ChatGPT is powered by gpt-3.5-turbo, their most advanced language model to date for a range of conversational AI services such as natural language processing (NLP) and text completion tasks, making it suitable for various chatbot applications.


OpenAI has recently launched a powerful new platform for enterprise clients called Foundry. This platform is an extension of OpenAI’s preexisting API service and offers an enhanced infrastructure for businesses to take advantage of in order to achieve larger scale projects.

Foundry comes equipped with a lightweight version of GPT-3.5, granting access to the latest advancements made in natural language processing. The pricing for this arrangement is relatively inexpensive compared to the utility it provides, with a three-month commitment costing $78,000 and a one-year commitment amounting to $264,000.

Foundry is a huge step up from their existing API service due in part to its ability to process more data at commercial scale for AI applications related to natural language understanding and reinforcement learning.

Those who benefit most from this newfound access are likely companies performing research or development needs on AI models and algorithms as they have proprietary access to OpenAI technologies such as OpenAI GPT-3 and OpenAI Requester.

By supporting bigger projects such as autonomous vehicle driving or facial recognition software optimization, Foundry can provide an enormous amount of value whilst maintaining customer privacy and reliability due to their secure enterprise model.

OpenAI and Microsoft

Microsoft and OpenAI have had a long-standing commercial partnership since 2016, becoming even closer in 2019 when Microsoft invested billions of dollars into their collaboration. This partnership has taken a leap forward with the multi-year commercial agreements that build upon the existing infrastructure providing by Microsoft to support continued growth for OpenAI.

Laptop, tablet, and phone with Microsoft software on screen

Under these commercial agreements, Microsoft will act as a distributor and integrator for OpenAI’s products. By doing this, Microsoft is able to benefit from the innovation of OpenAI’s technology while offering customers access to their products through popular applications like GitHub, Office and Bing.

The business model followed by this partnership is primarily one focused on services use — allowing businesses and consumers alike to pay with subscription or transactional fees in order to take advantage of Open AI’s technologies. This partnership is beneficial for both parties in driving progress towards furthering artificial intelligence.


The OpenAI LP is a for-profit partnership created by the OpenAI foundation that facilitates partnerships with private sector investors. Microsoft has been the main investor in the OpenAI LP and have recently put forth 1 billion dollars into this venture.

This investment gives Microsoft significant advantages, including access to computational power from Azure, AI technology developed at OpenAI, and even a tiered membership structure centering on the OpenAI Platform which only Microsoft can access. Microsoft also gets say into how OpenAI does business, but it’s still controlled closely by the founders of OpenAI due to its limited partners structure.

This strong alliance comes as no surprise considering both organizations’ joint goals in advancing artificial intelligence technology. Azure is part of many projects such as robots with superhuman skills, new conversational technologies, building autonomous gaming agents and reinforcement learning research such as AlphaGo Zero out of its AI research lab at Microsoft Research lab in Cambridge, Massachusetts.

Microsoft also opens up their AI tools to developers who create their own applications. As such, this investment will greatly benefit both organizations moving forward in terms of technological advances highly sought after in today’s world.

AI Supercomputer Microsoft Azure

Microsoft’s business model is quite diversified, but Azure – its cloud business unit – still remains the cornerstone of its success. Azure’s services have helped numerous startups to successfully launch their products and services on a large scale.

With Microsoft’s IoT-enabled edge computing power providing the necessary resources and software development platforms to easily build applications, many of these businesses have gone on to become prominent players in the tech industry, such as Slack and Uber.

Female hands holding phone on street with booked ride Uber on screen

As we start a new decade, AI technology enabled by cloud computing providers like Amazon AWS and Microsoft Azure has become increasingly prominent. AI is no longer an entity living on isolated computers within a company’s data center but is instead living in mass-scale cloud systems that store raw data for use across large groups and organizations that lack access to powerful compute resources.

As such, cloud providers are not just empowering small companies to turn their ideas into launching their own businesses but also enabling big corporations to revolutionize the way they do business with machine learning technology.


OpenAI demonstrates rapid innovation and is now starting to see positive results. Its successful launches of AI services in recent times have enabled OpenAI to become a major commercial player.

By combining extremely fast market penetration with the potential to drastically automate and reshape jobs, OpenAI could soon be making massive waves in the tech world. It is not yet a cash cow but given its strategic partnership with Microsoft and breakthroughs in AI technology, this may very well change in the near future.

However, at its core OpenAI remains a research lab owned by wealthy individuals and investors. Profitability continues to be a secondary objective behind innovation, which means that moving forward it could remain mainly focused on technological breakthroughs rather than financial gains. As such, it might never truly become a profit-oriented company but remain an esteemed research lab dedicated to advancing AI and robotics technologies for the betterment of humanity.

Adam is a crypto expert & AI enthusiast who has been researching and writing on the topics since 2017.

He’s spoken on numerous podcasts and has been featured in many prominent media publications such as Forbes, CNN & CNBC.