AI Pricing Is About to Shock Everyone: Why the $20/Month Era Is Ending

Alarmist BS.

Consumers are option-rich. AI companies are backed into a corner.

Right now inference costs a fraction of subscription prices. For AI companies that are making losses - like OpenAI - that's R&D costs and infra driving it. Not inference.

If OpenAI up their pricing now that opens the market for open weights models to eat up marketshare. OpenAI might stay relatively dominant but if a smaller company can profitably offer a frontier open model (that they didn't r&d) on a smaller server farm at $20/month profitably, then the shock is vastly limited.

And that's not the only solution. Hardware costs are sky-high now, but capacity is growing and innovation is being fuelled. If AI companies do raise prices some may see enough move to the cheaper alternatives for them to crash and burn. That will be a bubble deflating or bursting and it will flood the hardware market with cheaper RAM and other components. That's when those open models become viable for running at home, private and personal. Something a lot of people will find appealing. Then the cost to run becomes your electricity bill, or even solar powered.

US grid capacity is said to be a fraction of what it needs to be in coming years. Expansion, and green energy expansion across the world, as well as rising oil prices and instability mean electricity is only heading downwards in cost.

A shock is coming, but it's not going to be felt by everyone. Nowhere near.