OpenAI, the developer of the popular AI-powered chatbot platform ChatGPT, has begun testing a feature that allows new users to sign up with only a phone number, eliminating the need for an email address. This move is part of the company's efforts to reduce friction and increase adoption of its products.

The phone-only sign-up feature is currently available in beta in the US and India, and users can create a ChatGPT account by providing their phone number. However, there are some significant restrictions to this new feature. Users who create an account using their phone number cannot upgrade to one of OpenAI's paid plans, such as ChatGPT Plus or ChatGPT Pro, without verifying their account via an email. Additionally, multi-factor authentication is not supported without a valid email address.

Another limitation is that once a phone number has been used to create a ChatGPT account, it is blocked from creating new accounts. OpenAI explains that "recycled or reused phone numbers can lead to [an] error," and currently, there is no workaround for this issue. The company plans to address this problem in a future system update targeted for 2025.

OpenAI has stated that it has no plans to expand phone number sign-ups to other regions. This move is seen as part of the company's strategy to increase growth and adoption of its products, particularly ChatGPT. In December, OpenAI introduced an experience that allows US-based users to chat with ChatGPT over the phone for free for 15 minutes a month. Around the same time, the company brought ChatGPT to WhatsApp with limited functionality, capped to a certain number of exchanges per day.

ChatGPT has achieved significant success, with over 300 million weekly users contributing billions to OpenAI's revenue. According to CNBC, OpenAI reportedly expected revenue of $3.7 billion in 2024. However, despite its revenue growth, the company is still a long way off from profitability. OpenAI reportedly lost around $5 billion in fiscal year 2024, largely due to expenditures on office rent, staffing, and AI training infrastructure.

To address its profitability concerns, OpenAI is considering increasing the price of its various subscription tiers. CEO Sam Altman recently stated that the company is losing money on its priciest plan. Additionally, OpenAI is exploring usage-based pricing for certain services. As the company continues to experiment with new features and pricing models, it remains to be seen how these changes will impact its user base and ultimately, its bottom line.

The introduction of phone-only sign-ups for ChatGPT is a significant development in OpenAI's efforts to increase adoption and reduce friction. While the feature comes with some limitations, it marks an important step towards making AI-powered chatbots more accessible to a wider audience. As OpenAI continues to innovate and experiment with new features, the company's impact on the tech industry is likely to be significant.