Why is GPT-4o free?

OpenAI launched the best LLM yet with their new GPT-4o model.

The most surprising part of their announcement isn’t how great the model is. The shocking part is that they are allowing everyone to use it for free.

It got me thinking…

Why is GPT-4o free?

What is OpenAI thinking?
The majority of their revenue comes from their paying customers, who pay 20 bucks a month for ChatGPT Plus.

I’ve been paying for it since it came out, and now I’m wondering if I should cancel.

There must be some reason to the madness.

Here is a video I just made on the topic:

Here are my thoughts on why GPT-4o is free, and ChatGPT’s master plan for total domination.

1. Mass adoption. OpenAI wants as many people using their product as possible.
2. Competition is heating up. Meta’s Llama 3, Google’s Gemini, Anthropic’s Claude 3… These are all great models. OpenAI was the only show in town when they came out with their first model, but now, their GPT-3.5 model is lagging. They needed something great and free to grab back market share.
3. Training GPT-5 and beyond. More free users means more data collected by OpenAI. They can use this data to learn and train future models.
4. Scorched Earth theory. Other big players like Facebook, are offering free, open source models to “scorch the earth”. Basically, they are trying to ruin the economics of running a paid large language model company. If a large company can hand a competitor a setback, they see it is a win. OpenAI is responding to this by giving away their best stuff.
5. Network effects. OpenAI has a GPT store. It will be much more popular if everyone can use it. By allowing free users to make and use GPTs, there will be much more incentive to create GPTs, and improve the whole ecosystem. The more people use OpenAI’s models, the more likely developers will build products based on those models too.
6. GPT-5, AI agents, and Sora are coming soon! — This is my personal hot take. I believe that OpenAI is creating a lot of buzz around their free products, because they know they have something even better coming out soon. I’m thinking summer of 2024 (just a couple months away).

Remember, when ChatGPT went viral originally in November 2022, they only had a free product. It wasn’t until many months later (after millions people were already using the product) that they offered the upgraded paid version. I believe we are in that same position again.