ChatGPT’s New Text Features and Price Drop May Ramp Its Rate of Adoption to Lightspeed

ChatGPT is by far the most well-known generative Artificial Intelligence(AI) chatbot. However, competition in the area is rising as other companies release alternative solutions with better price offers.

To maintain dominance in the sector, OpenAI has resolved to upgrade its applications while simultaneously lowering prices with the hopes of keeping and attracting more users, especially developers.

ChatGPT Strives for Dominance

The most advanced version of text-generating AI, GPT-4, was released earlier this year but for the most part, has been reserved for premium services. This premium version is offered in the form of ChatGPT Plus which costs $20 a month to access.

However, users still have access to GPT-3.5-turbo via ChatGPT on the web and the recently launched ChatGPT app for free but with lesser capabilities.

Over the past few months, competing companies have built other versions of generative AI chatbots including Chatsonic, Perplexity AI, and Google Bard, among others. While they are yet to displace ChatGPT, they all threaten ChatGPT’s position in the market.

One feature that is meant to give OpenAI’s large language models (LLMs) a competitive edge is the function calling capabilities. According to OpenAI’s announcement, function calling enables developers to describe functions to the GPT models, and they will generate the appropriate code to create them.

With this feature, Open AI states that developers are able to create chatbots that answer questions by calling external tools or converting natural language into API calls or database queries.

This opens up a world of applications, from executing code and solving math problems to converting units and beyond. Experience boundless creativity as the models seamlessly integrate information from the outer scope into the prompt.

— 🟣 Stemble (@Stemble_) June 14, 2023

“These models have been fine-tuned to both detect when a function needs to be called and to respond with JSON that adheres to the function signature. Function calling allows developers to more reliably get structured data back from the model,” OpenAI explained.

An issue that has been spotted with some generative AI models is that they tend to “forget” conversations quickly. As a result, most of them end up offering the wrong responses when the questions are related to previous conversations.

This problem is related to the context window which refers to the amount of information the model considers before generating a response. To improve ChatGPT’s ability to consider context, OpenAI has also increased the models’ context window.

As such, the upgraded version, GPT-3.5-turbo-16k, will provide four times the context length of the initial version, GPT-3.5-turbo, at twice the price. Therefore, input tokens will cost $0.003 and output tokens cost $0.004 for every 1,000 tokens.

Despite this upgrade, OpenAI’s models will only be able to about 20 pages of text at a time, which is far less than the hundreds of pages that AI company Anthropic’s lead model, Claude, can process.

To win over more developers, OpenAI has announced a 25% price reduction for GPT-3.5-turbo. The model will be now available for $0.0015 per 1,000 input tokens and $0.002 per 1,000 output tokens, or about 700 pages per $1.

This makes it more affordable than Anthropic’s Claude model which is priced at $1.63 per million prompt tokens and $5.51 per million output tokens.

OpenAI is also slashing prices for text-embedding-ada-002, which is one of its most popular text-embedding models. The model, which is commonly used for searches and recommendations due to its ability to measure the relation between words, will now cost $0.0001 per 1,000 tokens, a 75% reduction from the previous price.

OpenAI’s Strategies for Penetrating The Market

Despite the massive wave that ChatGPT took the internet with, the company has struggled to penetrate the market further. Unlike what it may seem, not every internet user has interacted directly with the application.

In fact, according to statistics by Statista, only 30% of all adults in the United States have had a proper interaction with ChatGPT and a staggering 55% have not used the chatbot at all.

The company has therefore made attempts to bring the chatbot closer to users as a way of having more people use the technology. This led to the development of the ChatGPT App since what better way to bring technology closer to people than through their phones?

The app has been a massive success gaining close to a quarter of a million downloads in the first 24 hours.

Another way the company can get closer to users is through other products and services that incorporate AI capabilities. To this end, OpenAI is also in the business of selling AI API services to developers.

However, this market has seen an increase in suppliers as many companies and startups have come up to develop and sell access to AI services. This has necessitated the changes that OpenAI has made especially to its pricing in order to attract and retain more developers and find its way into more apps.

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