Worth Reading – AI’s Economics Don’t Make Sense
I’m starting to see and hear more people talk about this. The current pricing for AI tools makes no sense.
Microsoft — like every AI company — swindled its customers by selling an unsustainable service, because it never, ever made sense to sell LLM-powered services on a monthly subscription.
I’m cherry-picking the Microsoft note, but the same is true of every AI company out there. Unlimited Copilot interactions cost much, much more than $30 per month in compute costs. Someday, Microsoft and all the other companies will have to change their entire model to show any profit.
Is your organization prepared to absorb a 30-40x increase in AI costs? If you’re $30/month subscription moves to $500/month with limits, what does that look like for your budget?
I don’t know that anyone is prepared for that, but the price will eventually go up. It’s only a matter of time, and how much.
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