OpenAI’s decision to expand free access to ChatGPT Projects has created a turning point for SaaS and AI-as-a-Service. By giving away core features while reserving advanced tools for paid users, the company has managed to grow adoption at record speed while building a profitable upgrade path.
Free ChatGPT Projects fuel user growth
Launched for all users on September 3, 2025, the free tier of ChatGPT Projects lets people organize chats, upload up to five files, and add workspace customization. Limits remain strict, just 10 GPT-5 messages every five hours, but the taste of premium features is enough to drive upgrades.
Meanwhile, Plus and Pro tiers raise those limits significantly. Plus users can handle 25 files and send 160 GPT-5 messages every three hours. Pro goes further, supporting 40 files and thousands of GPT-5 Thinking messages weekly. This tiered model hooks new users and locks in professionals who need power features.
Nest Cams and Doorbell leak in Google Home hints at wired models, 2K video, new colors, and Gemini for Home ahead of Oct 1.
Conversion rates outpace SaaS norms
The freemium strategy is working. By August 2025, weekly active users reached 700 million, up from 500 million in March. Even more telling, 5.8% converted to the Plus plan at $20/month, producing 15.5 million paying subscribers. That rate beats the industry average of 2–5%, proving users see real value in premium features.
Enterprise adoption and retention
The strategy extends beyond consumers. Over 5 million enterprise users, including 80% of the Fortune 500, now rely on ChatGPT Projects for workflow automation and data orchestration. Retention is strong as well: 89% of Plus subscribers stick after one quarter, and 74% stay past three. Once users build workflows, switching becomes costly.
Competitors respond to OpenAI
Rivals are already reacting. Microsoft Copilot is tied deeper into Office 365 at $30 per user, while DeepSeek pushed token pricing as low as $0.0005. Jasper and Copy.ai leaned on seat-based tiers for teams. Even so, OpenAI’s moat GPT-5 performance, its GPT Store, and enterprise ties keep it ahead.
What it means for investors
For investors, the rise of ChatGPT Projects signals three clear trends:
- Valuation surge: AI SaaS firms trade at 25.8x revenue, far above traditional SaaS multiples.
- Freemium validated: free tiers build scale, while premium plans capture high-value users.
- Compute risk: billions in infrastructure costs still weigh on margins and profitability.
ChatGPT Projects set the new SaaS model
By lowering entry barriers while monetizing through tiers, ChatGPT Projects demonstrate how freemium AI tools can scale globally and retain loyalty. For SaaS and AIaaS, this may be the blueprint of the next decade.
