Do you have any evidence that the AI efforts are not being funded by the AI product, Kagi Assistant? I would expect the reverse: the high-margin AI products are likely cross-subsidizing the low-margin search products and their sliver of AI support.
Actually if you use LLMs sized responsibility to the task it's cheaper than a lot of APIs for the final product.
The expensive LLMs are expensive, but the cheap ones are cheaper than other infrastructure in something like quick answer or quick assistant