Record-Breaking Success: Inside ChatGPT's $4.5M Monthly Revenue

0:00The mobile landscape for AI chatbots, I think right now is witnessing a whirlwind of activity. ChatGPT, of course, is the leading contender in the whole arena. And I think it has given the market both, you know, some very positive things and also some areas where we're a little bit concerned. So first off, let's start with the good. So ChatGPT's momentum in mobile, I think, can't be overlooked. In September alone, the platform had around 15.6 million downloads. This was, you know, record breaking for them. And this is across its iOS and Android apps worldwide. Now, I mean, one thing I will mention here that I think is kind of noteworthy in this, this kind of uptick in downloads.

0:42I, for one, am an avid ChatGPT user. I use it, you know, every single day, every workday at least, probably less so on the weekends. But I have not used it on my phone up until recently. First off, I have an Android, so it wasn't available for a while on Android when they just did iOS. And so I think the fact that they're kind of setting breaking new records right now a big part of this could just be with you know having the android app and now i know this is a couple months old but still um i think it's probably picking up steam there was a whole bunch of like knockoff android apps before that were kind of on the market um that were like you know it's called like ai chat app and like a bunch of random things you know and i think that uh those got a lot of just traction a lot of people downloaded them they were like they were ranking in the top charts and they were literally just they just had the api to open an AI.

1:34So it was literally just Chad Chippity that was trying to get you to pay more for it on Android. In any case, eventually, of course, Chad Chippity came out with their actual app and kind of squashed this a little bit. But the interesting thing was, as soon as they came out, they weren't instantly ranked the number one AI chat app because they'd taken a few months and they'd given these other companies time to get tons of reviews, tons of traction, tons of downloads, kind of build their portfolio and their profile on the Android app store and the Google Play store or whatever. And it was kind of hard for OpenAI, I think, for a moment to kind of like edge their way up.

2:08So I think by now, OpenAI has kind of broken through. They're probably viewed as the top, you know, the actual ChatGPT app. And now that I think they have that spot on iOS and Android, they're probably getting a lot more of those downloads because honestly, of those 15 million downloads, I'm sure you could go to a handful of like knockoff ChatGPT apps on android and they'll have like 5 million downloads each so or maybe more maybe 10 it'll it's kind of crazy in any case um i think that this definitely contributes to them kind of breaking their own record with that 15 million downloads last month i think this takes its lifetime tally to around 52.2 million downloads total on their app as this is according to data from market intelligence company app figures i think notably google play was kind of the dominant force driving this trend accounting for about 9 million of the September down loads with Apple's app store having about 6.6 million and again this could just be because you know they held out longer for Android so now Android's kind of just catching up to what Apple was doing and in addition I'm sure this is really popular for quite a global audience of course a lot of people in India I have found statistically use Androids and there's a huge population there that is very interested in AI what's going on here.

3:24So I think that will contribute to the Android app becoming very popular. I think furthermore, the AI chatbot didn't stop at just amassing downloads. It also celebrated a high in terms of gross revenue. So it raked in around$4.6 million across its apps globally. The growth narrative for ChatGPT kind of started off robust with gross revenue at about 2.1 million in June, and then went up to 2.7 million in July, then 3.8 million in August. And finally, it hit 4.5 million in September. So let's talk about some things that might not be so good. A couple areas of concern that ChatGPT and OpenAI are probably experiencing right now.

4:07So I think while gross revenue figures might paint a picture of, you know, this company, that's a rocket ship, it's got an unstoppable ascent. I think a deeper dive kind of reveals the onset of perhaps a potential storm, right? So the platform's revenue growth rate, which had been sizzling at 31 % in July, and it was even hotter in August at 39%, it hit about 20 % in September. So it definitely slowed down. I think this deceleration may hint at ChatGPT kind of approaching its saturation point when it comes to mobile users and what they're willing to spend for their premium chat GPT plus subscription.

4:46It's priced at about$20 a month. And essentially, when you get chat GPT plus, it just gives you faster response times priority usage during peak usage hours, and a first look at some of the fresh features and enhancements that they add. So if you want to be in line to get the you want to be the first person to get the new features, if you want it to be a little bit faster, and if you want to get, you know, priority during peak usage hours, which to be honest, I think is a good value add. Like I remember using chat GPT when it was like at the peak of its hype and I was just on the free account and it'd be like, you know, like, sorry, we're kind of maxed out.

5:22Try again later. And you just like hit refresh, refresh, refresh on your question. And it was kind of, it was kind of a bummer. And so I upgraded to chat GPT plus and have never had that problem since maybe the usage also is down. But in any case, I use it every day. I use it for work. Like I need it to work exactly when I like need it. I need answers immediately. I don't want to wait. I want it as fast as possible. So for me, this is like a no brainer and it's a great price. I'm happy to pay. Let's look at the broader landscape. So I think there are some surprises in the kind of broader AI chatbot space.

5:56So for instance, despite chat GPT is really impressive numbers. It's not the revenue kingpin. So that actually the title for that actually goes to ask ai which is another player in the space which despite a slight dip in september to 5.1 million has outpaced chat gpt thanks in part to its really aggressive ad spend so in contrast another competitor um called genie and also ai chat smith haven't actually managed to grow as large as ask ai so those ones are not there but it's really interesting to see that someone essentially made a knockoff, you know, chat GPT. They probably like on Android took advantage of the fact that they weren't on Android immediately.

6:35And they were able to get up to 5.5 million dollars in revenue. Now, like I mentioned before, they have spent very aggressively on advertising. So I wouldn't be surprised if like, let's say they spent that five million dollars just straight on ads. But what that does is it allows them to grow really big. Like I mentioned earlier, they are seen as an authority in the app store, they get a ton of reviews, a ton of downloads a ton of people using them. And when people already are using them and kind of like them, they may not even feel the need to switch to ChatGPT. So even if let's say, you know, they spend$5 million in September, they get$5 million in revenue.

7:09Well, next month, because this is a monthly fee, they might be actually outpacing that. And in addition, that's a ton of people that have it on their phone. And if it's a good user experience, they'll just tell their friends like, hey, go download Ask AI, instead of telling them to go download ChatGPT. So, you know, may have been a really good move by Ask AI to be very aggressive on this at the beginning. I think, however, when you take into account net revenue, the tables might actually turn, especially considering Ask AI's ad expenses. So as for ChatGPT, it had nearly$3.2 million in September post the deductions by Apple and Google in and out purchases, right?

7:44So of course, the 4 million that they made or whatever is impressive, but Apple and Google take 30 % of your revenue if you make more than a million dollars a year um if you make less than that like like my i have some apps on the app store that make less than a million dollars a year i'm in total revenue and so i applied for like a kind of like a small business thing where essentially they only take 15 of your revenue only take right compared to like a credit card processor that takes three percent the 15 still kind of hurts sometimes but um you know definitely not as bad as 30%. This is something that's been very contentious.

8:20Spotify is like upset because Spotify is a massive company and, you know, Apple is essentially milking them for 30 % of all their in-app purchase revenue and then launches a competitor, which is Apple Music. So yeah, that's got some antitrust stuff written all over it, I feel like. But in any case, I think regional dynamics are important in this whole conversation. So the AI chatbot app market also has its geographical preferences. So while Google Play may be driving chat GPT's downloads, the App Store is where the money's at. It contributes$3 million of the total in-app purchases in September.

8:54Originally, the US emerges as the AI chatbot's biggest fan, accounting for around 60 % of the revenue. And this is another thing that I have seen in my own apps on the App Store again, right? So let's play that back, right? The App Store on iOS was three million dollars of the total in-app purchases in September of their like four point something million so if if like that's significant right and I think this is what I've seen as well um iOS always pays a lot more I think it's part part of it is just like people that have iPhones spent a lot more on their phones they're willing to spend a proportionately higher amount on the software they're also usually from a higher um you know like a higher salaried demograph um than than Android users.

9:40A lot of Android users are from other countries that don't have the same, that have, you know, less wealth than America, for example. So I think that's just something that's to be very expected. I think for me, it's something like 60 or probably like 70 % of all revenue I make from apps, even if they're apps on both iOS and Android, 70 % of the revenue is always going to be from Apple. That's just what I always find. So, so I think that while, you know, massive downloads and then significant revenue milestones, the emerging trend of slowing revenue growth is something that I think we're going to want to watch out for.

10:16Only time is going to tell if this is just a blip or if this is kind of a sign of things to come and the revenue has permanently slowed. We'll definitely be following the story.