On February 1, 2023, OpenAI did something that seemed risky: they started charging for ChatGPT. Twenty dollars per month for ChatGPT Plus, a premium tier with better access and performance.

Critics predicted failure. Why would people pay for something that had been free? Within weeks, hundreds of thousands subscribed. By the end of 2023, millions had.

This is how AI became a subscription business.

The Free Tool That Broke

ChatGPT had been live for just two months, and OpenAI had a problem: too much success.

By late January 2023, millions were using ChatGPT daily. The service buckled under demand. During peak hours, you'd see error messages: "ChatGPT is at capacity right now." You'd wait, refresh, try again.

The free service was becoming unusable during the times people most wanted to use it.

OpenAI faced a choice: limit access to everyone, or create a paid tier that guaranteed access. They chose the latter.

The Launch

February 1, 2023, OpenAI announced ChatGPT Plus. The promise was simple:

What You Got:

• Available even when demand is high
• Faster response times
• Priority access to new features

What You Paid: $20/month

No free trial. No promotional discount. Just a straightforward subscription.

The Skepticism

The announcement sparked immediate debate. Tech Twitter questioned whether anyone would actually pay:

"It's just a chatbot. $20/month?"

"There will be free alternatives."

"This will fail like every paid AI product before it."

The skeptics were wrong. Very wrong.

Why People Paid

Within hours of launch, signups flooded in. ChatGPT Plus wasn't a hard sell—it was addressing real pain points.

1. The Capacity Problem

If you used ChatGPT during peak hours (lunch breaks, evenings, weekends), you knew the frustration of "at capacity" errors. Plus subscribers never saw that message.

For people who relied on ChatGPT for work, $20/month was a no-brainer. The time saved not fighting for access paid for itself immediately.

2. Speed Matters

Plus subscribers got faster responses. Not slightly faster—noticeably faster. When you're in a flow state writing or coding, waiting seconds instead of tens of seconds makes a huge difference.

Professionals doing dozens of queries per day found this alone worth the subscription.

3. The Future Mattered

OpenAI promised priority access to new features. Nobody knew what that meant yet, but people bet it would be valuable.

They were right. When GPT-4 launched in March 2023, it was ChatGPT Plus exclusive. That alone drove massive subscriptions.

The Business Model That Worked

ChatGPT Plus proved something the tech industry had struggled with: people will pay for AI services.

Previous attempts at consumer AI products mostly failed. They were either too expensive, too complicated, or not valuable enough. ChatGPT Plus succeeded because:

Clear value: You knew exactly what you were paying for Fair pricing: $20/month felt reasonable for professionals Immediate benefit: No waiting for ROI—you got better service instantly

By mid-2023, ChatGPT Plus had millions of subscribers. At $20/month, that's hundreds of millions in recurring revenue. OpenAI had created the first major AI subscription business.

The Competition Reacts

The success of ChatGPT Plus sent a message to every tech company building AI: there's a market for premium AI services.

Within months:

• Google kept Bard free but clearly watched the subscription model
• Microsoft launched Copilot Pro ($20/month)
• Anthropic introduced Claude Pro ($20/month)
• Dozens of startups built subscription AI tools

The $20/month price point became the industry standard. Everyone copied OpenAI's homework.

The Tiering Strategy

ChatGPT Plus taught the AI industry about tiered pricing. Keep a free tier to drive adoption and viral growth. Charge power users who need reliability and advanced features.

This model proved surprisingly effective:

• Free users spread awareness
• Some convert to paid
• Revenue funds development
• Better models drive more subscriptions

It created a flywheel that fueled rapid AI development.

Where Are They Now?

Today, ChatGPT Plus is just the middle tier. In December 2024, OpenAI introduced ChatGPT Pro at $200/month, targeting researchers and enterprises who need unlimited access to the most advanced models.

The pricing tiers now look like:

• Free: GPT-3.5 and limited GPT-4o
• Plus ($20/month): Unlimited GPT-4o, DALL-E 3, priority
• Pro ($200/month): Unlimited o1, advanced features, maximum priority

Millions subscribe to Plus. Thousands pay $200/month for Pro. The subscription model that seemed risky in February 2023 now looks obvious.

But it wasn't obvious at the time. OpenAI took a bet that people would pay for better AI. That bet paid off, creating a new category of software subscription and proving that AI isn't just a cool demo—it's a product people value enough to buy.

February 1, 2023 was the day AI stopped being just free and started being a business.