ChatGPT's API is So Good and Cheap, It Makes Most Text Generating AI Obsolete

published on 2023/03/12

Everyone knew OpenAI would release an API for ChatGPT at some point. The APIs for GPT-3 alone enable the existence of companies such as Jasper and The real question was the price of the ChatGPT. For context, when GPT-3 went out of beta in 2021, it cost $0.06/1,000 tokens (a few paragraphs of text). An inflection point happened in August 2022, where OpenAI not only reduced the price to 1/3 ($0.02/1,000 tokens: enough to run a business on it but still too expensive for casual use), but soon after also introduced text-davinci-003 as the default GPT-3 endpoint: a finetuned GPT which can follow instructions very well. I suspected that OpenAI would charge double for the ChatGPT API compared to the GPT-3 API given the amount of hype, as that’s typical price discrimination since everyone perceives ChatGPT to be much better and that they would not want to overshadow their existing GPT-3 products.

Instead, on March 1st, OpenAI set the price of the ChatGPT API to 1/10th of the GPT-3 API, at $0.002/1,000 tokens.