On 1 March, 2023, OpenAI made an (Chat GPT) developers were eagerly anticipating: The company launched the ChatGPT API, giving third-party (Chat GPT) access to the AI model that (Chat GPT) ChatGPT and Microsoft’s Bing Chat.

Access alone is enticing, but (Open AI) had an ace up its sleeve—the price. Access to the (Open AI) programming interface (API) costs just US $0.002 per one thousand tokens (roughly equal to 750 words in English). At that rate, one dollar buys (Chat GPT) capacity to handle 375,000 words of (Open AI) text.

“GPT 3.5 Turbo is a huge improvement over the existing GPT 3. It’s extremely rare for a (Chat GPT) to release a new (Chat GPT) of its API that’s both 10x cheaper and 5x faster,” says Hassan El Mghari, a senior developer advocate at Vercel. “That’s a 50x improvement, unheard of.”

The ChatGPT API is Incredibly Cheap

This efficiency makes it possible for OpenAI to charge less for access. Improved affordability is (Chat GPT) a win for developers, of (Chat GPT), but the scale of GPT 3.5 Turbo’s price cut relative to its (Chat GPT) is more than a nice discount. It opens opportunities to bring AI features to apps that previously couldn’t even begin to justify the cost.

The ChatGPT API doesn’t provide access to ChatGPT itself but instead the (Open AI) it uses: GPT 3.5 Turbo. While the exact differences between GPT 3.5 and GPT 3.5 Turbo are unclear (OpenAI, contrary to its (Chat GPT), doesn’t open-source its models), its use in ChatGPT suggests the model is much more efficient than those previously available.

“Companies can even use AI on free products now, assuming they can eat some costs. Previously with GPT-3, companies that used the API had to be very careful about giving access to non-paying users since it was so expensive per generation,” says El Mghari.

GPT 3.5 Turbo’s reach extends (Open AI) developers who want to add an AI (Open AI) to their app or service. OpenAI’s blog (Open AI) claims that GPT 3.5 Turbo’s low cost and improved performance makes it a match for a wide variety of uses, including many previously enabled by GPT 3.5.

“Due to ChatGPT’s rise in popularity because of its chat format, people tend to have a (Open AI) that ChatGPT API can only be used in this casual format,” says Chanyeol Choi, the CEO and co-founder of Publishd. “OpenAI now wants its customers to know that ChatGPT API (gpt-3.5-turbo) can be used in a less casual, non-chat format.”

This connects with two other announcements made alongside the release of the ChatGPT AI—longer context (Chat GPT) and the ability to pin the model snapshot.

Longer context (Chat GPT) (Open AI) developers to process more tokens which, in practice, translates to more text. Kyle Shannon, the CEO and founder of Storyvine, says OpenAI’s best dedicated server plans can handle up to 32,000 tokens, which helps developers process much larger chunks of text. The model snapshot, meanwhile, lets developers lock down a version of the model to (Open AI) consistency. “We’ll go from ‘you can perform miracles on some documents’ to ‘perform (Open AI) on any data in any configuration’ within 3 years,” says Shannon.