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Why ChatGPT is free when it costs a fortune

Every question you ask costs someone money. Here is who pays, and what you give in return.

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This morning, you may have asked an AI a question. A recipe, an email to reword, a silly question you didn't dare ask anyone.

That answer cost money. Not you.

What an answer costs

When you press "send", your question travels to a data centre: a vast hangar filled with specialised computers, running day and night and consuming as much electricity as a small town.

For a single answer, the cost is tiny — a fraction of a penny. But these services answer hundreds of millions of people every day. Multiply that, and you get several million euros... per day.

Someone pays that bill. And it isn't you, at least not directly.

So why is it free?

Because it's a sample. It's the supermarket tasting principle. They give you a piece so you'll buy the packet. A small share of free users end up paying for a subscription, and they are the ones funding the rest.

Because habit is worth gold. The service you open without thinking when you have a question is the one that has won. Companies are spending fortunes today to become that reflex. Once it's in place, it's very hard to dislodge.

Because investors are paying while they wait. These companies raise tens of billions. Part of that money goes, very concretely, towards giving you answers. Investors accept losing money now, betting they'll make far more later.

The good news: it's getting cheaper and cheaper 📉
The price of an answer is collapsing. This very week, two major companies halved some of their rates, on the same evening. Models capable of helping with simple tasks now cost a few pence for thousands of answers. In other words, free is becoming easier and easier to sustain. What was a crazy expense two years ago is becoming a reasonable cost.

What you give in exchange

Free doesn't mean without a price. You give three things.

Your attention. Every minute spent on a service is a minute you're not with a competitor.

Your conversations, depending on your settings. Some services may use what you write to improve their models. It isn't automatic everywhere, and you can often turn it off. It's worth checking your settings, particularly if you paste in personal or work information.

Your dependence. The more you use it, the more you organise your habits around it. The day the terms change, leaving costs more.

What free really gives you

A small secret not everyone knows: the free version often isn't the same model as the paid one.

To keep costs down, free services generally use a smaller, faster, slightly less capable model. With limits: a certain number of questions per day, features reserved for subscribers.

For most everyday uses, that's more than enough. But if an answer disappoints you, it isn't necessarily that "the AI" is bad. It may be that you're talking to the small version.

How long it will last

The real question isn't "why is it free". It's "until when".

As long as costs fall faster than investors' money runs out, free holds. If that reverses, someone will have to pay. Either you, with a subscription. Or otherwise, in a way we can't yet see.

In the meantime, make the most of it with your eyes open. And go take a look at your privacy settings: it's the only thing this free service really asks of you, and you're the one who decides.

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