Product
01/03/2023Estimating the cost of using ChatGPT
ChatGPT is cropping up in products and startups want in on the fun. But is there a big barrier to entry in terms of cost? We explore the topic further, so you can make an informed decision about what to do next, jump on the ship, wait and watch or abort.
In December, OpenAI CEO Sam Altman said compute costs for the model were “eye-watering”. Here is that tweet, in response to the question if ChatGPT was going to be free forever -
we will have to monetize it somehow at some point; the compute costs are eye-watering
— Sam Altman (@sama) December 5, 2022
But things are changing. OpenAI is now shifting the cost structure to make its ChatGPT engine more accessible to developers. They recently released the ChatGPT API (gpt-3.5-turbo), which is priced at a significantly lower cost than their flagship language model (text-davinci-003). Compared to the text-davinci-003 model, the ChatGPT API costs only a tenth of the price, which represents a 90% decrease in cost.
With the decreasing cost of AI, an increasing number of companies will adopt it, leading to the emergence of numerous new projects. Furthermore, developers who were concerned about OpenAI using user-submitted data for model training can now breathe a sigh of relief, as they will not do so.
But what does the decrease in cost mean in practice? Below is a table comparing the price of the two models -
| Tokens | Approx. Words | ChatGPT API (gpt-3.5-turbo) | Text-davinci-003 |
|---|---|---|---|
| 1,000 | 750 | $0.002 | $0.02 |
| 2,500 | 1,875 | $0.005 | $0.05 |
| 5,000 | 3,750 | $0.010 | $0.10 |
| 10,000 | 7,500 | $0.020 | $0.20 |
| 25,000 | 18,750 | $0.050 | $0.50 |
| 50,000 | 37,500 | $0.100 | $1.00 |
| 100,000 | 75,000 | $0.200 | $2.00 |
| 250,000 | 187,500 | $0.500 | $5.00 |
| 500,000 | 375,000 | $1.000 | $10.00 |
| 1,000,000 | 750,000 | $2.000 | $20.00 |
| 1,250,000 | 937,500 | $2.500 | $25.00 |
| 1,500,000 | 1,125,000 | $3.000 | $30.00 |
| 1,750,000 | 1,312,500 | $3.500 | $35.00 |
| 2,000,000 | 1,500,000 | $4.000 | $40.00 |
Based of these updates, several businesses have adopted ChatGPT API, including Snapchat, Slack Shopify, and Quizlet. You can watch their use cases in our blog post on real-world examples of companies using ChatGPT.