AI's Affordability Crisis
This article argues that AI companies are artificially subsidizing their services to build user dependency before eventually raising prices. It highlights the massive gap between the cost of generating AI tokens and the revenue generated by subscription fees.
Why it matters
It questions the long-term economic viability of the current AI business model and suggests a potential 'affordability crisis' as companies seek to recoup massive infrastructure investments.
I pointed out that the AI platforms were running the drug-dealer's algorithm, "the first one's free". By massively subsidizing the use of their products, they were generating overwhelming demand for them. They used this demand to justify massive investments, in the hope that, by the time they had to show a return on these invetment, the users would be so addicted that they would pay the vastly higher prices needed to generate a return.
The article presents a critical financial analysis of industry trends without taking a partisan political stance.
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