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The $200 Power Move
GM! It’s Brett again. I was watching an old interview of Steve Wozniak recently, and it got me thinking - when I was a kid, I was obsessed with creating things. I remember spending days engineering a LEPRECHAUN TRAP for St. Patrick's Day in elementary school.
While I was never a math/science kid, the creative bug has been in me from an early age and it 100% explains my chosen life path in startups.
And you know what's wild - almost every great builder I've met/read about has some version of this story - that weird kid who just couldn't stop making things.
Anyway, let's get to it.
🏠 AI
Compute Ain't Free
OpenAI kicked off their "12 Days of OpenAI" event with their full o1 model and a new $200/month ChatGPT Pro subscription.
Sam says the o1 model’s faster, smarter, and can finally handle images. Every ChatGPT Plus user gets access.
we just launched two things:
o1, the smartest model in the world. smarter, faster, and more features (eg multimodality) than o1-preview. live in chatgpt now, coming to api soon.
chatgpt pro. $200/month. unlimited usage and even-smarter mode for using o1. more benefits to come!
— Sam Altman (@sama)
6:19 PM • Dec 5, 2024
That $200 Pro tier is all about compute power. You get unlimited access to o1, GPT-4o, Advanced Voice, and this special "o1 pro mode" that supposedly thinks harder on complex problems. OpenAI's pitching this to power users - you know, the researchers and engineers who need that extra oomph.
almost everyone will be best-served by our free tier or the $20/month plus tier.
a small percentage of users want to use chatgpt a TON and hit rate limits, and want to pay more for more intelligence on really hard problems. the $200/month tier is good for them!
— Sam Altman (@sama)
12:56 AM • Dec 6, 2024
Interestingly, the full release shows lower performance scores than the preview version on some key technical benchmarks like MLE-Bench.
Based on their own testing:
o1 performs worse than o1-preview in
- MLE-Bench
- SWE-bench Verified
- OpenAI RE Interviews
- some of "Agentic Task suite" (like starting a Docker container)
- CTF challengescc @aidan_mclau
— Xeophon (@TheXeophon)
6:24 PM • Dec 5, 2024
And some independent testing shows the performance gap between o1 Pro and competitors like Claude Sonnet 3.5 (at $20/month) isn't nearly as wide as that 10x price difference suggests, atleast for everyone.
this guy spent 8 hours testing ChatGPT o1 pro ($200/month) vs Claude Sonnet 3.5 ($20/month)
the results were "surprising"
— GREG ISENBERG (@gregisenberg)
9:04 PM • Dec 7, 2024
Though we'll need more real-world testing to validate these early findings. While OpenAI's internal testing shows the full o1 reduces major errors by 34% compared to its preview version on difficult questions, we'll get a better picture of its actual capabilities as more users start working with it.
But with OpenAI leading the consumer AI market, this move signals something bigger. This pricing strategy might be reshaping the entire AI market by creating a new pricing tier in consumer AI - one that normalizes enterprise-level pricing for power users. Don't be surprised if other AI companies follow suit.
After all, these compute costs are real, and someone's got to pay for them. OpenAI alone is looking at $5 billion in losses this year, with ChatGPT previously costing them $700,000 per day to run. Someone's got to pay for that compute.
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