This massive price cut, I believe, is intended to undercut competing open source ChatGPT equivalent initiatives.
OpenAI/Micorsoft may be losing money with this new pricing, but that is on purpose. At these lower prices most of the OpenSource alternatives in the works will have difficult time continuing projects.
After few years, when most open source alternatives have died, OpenAI/Microsoft will gradually raise the prices.
This is the same strategy that Amazon Prime used for many years, losing money on shipping. Once the competition was eliminated, Amazon Prime prices steadily increased.
It can also be to build a market, to encourage customers to invest in building atop this.
In any case, I think no customers should be making assumptions about costs too far ahead. (Since the price could go up or the price model change, the supplier could get out of that business, supplier could give your competitor a better deal or just cut you off , near-future tech evolution necessary to be competitive might have very different pricing or availability to you, etc.)
This massive price cut, I believe, is intended to undercut competing open source ChatGPT equivalent initiatives.
OpenAI/Micorsoft may be losing money with this new pricing, but that is on purpose. At these lower prices most of the OpenSource alternatives in the works will have difficult time continuing projects.
After few years, when most open source alternatives have died, OpenAI/Microsoft will gradually raise the prices.
This is the same strategy that Amazon Prime used for many years, losing money on shipping. Once the competition was eliminated, Amazon Prime prices steadily increased.