ChatGPT's growth has flatlined

Is it an Enterprise or Consumer product?

Hello,

ChatGPT took the world by storm when it launched 1.5 years ago in Nov, 2022.

One of the fastest growing tech company in history, OpenAI - ChatGPT’s owner, was last valued at $80 Billion earlier this year - almost 3x growth in valuation in 10 months.

Interestingly, data suggests that traffic to its consumer facing web application (i.e. chat.openai.com in desktop/mobile browser) has not grown for the last 12 months!

We explore this trend in today’s post.

DATA STORY

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Total visits to ChatGPT grew from nowhere to reach ~1.8 billion visits in Apr’23. However, traffic growth has since flatlined, going down and back up but never breaking its Apr-23 peak in the last 12 months.

For a breakthrough consumer product - the chart above isn’t a great look.

And the product isn’t stagnant - ChatGPT has made many improvements since its launch (highlighted in the chart above).

So what’s going on?

Is ChatGPT a hype product that is struggling to get new users after initial interest waned off?

There are some possible explanations:

(1) Move to Enterprise

The most plausible explanation is that ChatGPT (or Generative AI)’s main customers are businesses and not consumers.

It launched as consumer facing product, but now OpenAI is focused on selling its tech (GPT4, ChatGPT and other AI products) to businesses. Hence, traffic to its WebApp doesn’t matter.

Recent reports indicate that 92% of Fortune 500 companies are already using its consumer version but Sam Altman (Open AI CEO) wants companies to buy the enterprise version.

Data from 3rd party sources also confirm this view.

For Example, Ramp (a fintech in US serving businesses) reported that OpenAI was the #1 AI vendor amongst its customers (businesses with fewer than 1000 employees)

(2) Rise of Competition

It is not the only game in town anymore, and others have caught up. Since messing up its Bard Launch, Google has gotten its act together (somewhat) with Gemini which has scaled much better.

Other competitors like Anthropic (Claude) and CharacterAI are stealing traffic away from ChatGPT with its own foundational models. The picture below shows the latest figures.

(3) Power users are now on Mobile Apps

It could also be that some of the traffic growth is compromised by power users relying more on the mobile app for their daily usage of ChatGPT. ChatGPT’s iOS and Android apps had more than 100 million total downloads in 2023 or avg. of ~17 million downloads per month. However, thats not a lot, and doesn’t even come close to monthly downloads of popular social media and messaging apps. Hence, Mobile App usage shouldn’t impact growth of Web traffic to this extent.

I also think GPT 3.5 model, which the free version of ChatGPT uses, isn’t the best and most people who “try” ChatGPT might be turned off by poor results.

Keeping GPT-4 behind paywall might be preventing more widespread adoption of ChatGPT.

When ChatGPT was released, there were many who called it a “Google Killer”. In April 2024, almost 1.5 years after ChatGPT launch, Google still had 83.5 billion visits, 4524% higher than ChatGPT who had 1.8 billion visits. A sobering reality that its not going to be easy to break Google’s monopoly on Search.

Do you think ChatGPT will take substantial market share away from Google Search in the next 3 years??

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BUSINESS QUIZ

Image from CNBC

OpenAI originally started as a Nonprofit in 2015

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GOOD READS

Sharing some fun and useful links that you may also like:

  • [Resource]: A one-stop shop to find high quality icons to jazz up your presentations. Been using them for years.

  • [Deep Dive]: Super interesting & Visual report on business spending benchmarks by Ramp. Interesting findings on AI software services & Advertising spends.

  • [Fun]: A gif showing how maps distort the real size of countries

  • [Long Read]: A fascinating read on how our lives are becoming a game

For those who didn’t attempt the quiz, the correct answer is Yes

That’s all for this week. Thanks for reading! 👋

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