But the question is how much are people willing to pay for AI.

I use AI every day at work, but I only pay $20. That's the most I will ever want to pay. And, so far, it gives me everything I need.

If OpenAI or Anthropic suddenly said "Sorry, the game is up. You'll have to pay $100/month now", I would 100% look into cheaper Chinese solutions.

I suspect the AI subscription (or API) economy is whale economy. You have a small, small percentage of users that are happy to pay whatever it takes - while the vast majority will either use the free tier, and then the next group will pay for the cheapest or next cheapest subscription.

EDIT: And I'll echo what another user wrote here. The VAST majority of office users around the world don't work for tech companies flush in cash. Even adding something like $20 - $100 subscriptions to every user is a serious enough financial obligation that it needs to go through budget planning / boards. Even more so for all the government workers around the world.

The reason uber didn't loose that much business is because it replaced the established businesses and left most consumers with little alternative.

That's not the case with AI - unless the frontier labs achieve AGI or some sort of super intelligence that lets them create infinite economic value (at which point, any further discussion is pointless for obvious reasons), the average worker can do most of their tasks with 5% of the api costs using an open source model from China and achieve the same results.

$80 per month in a 5,000 people Enterprise is 400k per month which translates to ~5m per year. That is easily in the 8-16% of their total IT budget. I don’t know you, but companies don’t like to increase recurring cost. Is AI good? Yes. Is it clear how it generates enough ROI to justify a material IT cost increase? No. This is the problem now, not how much white collar workers use AI, but what is the productivity narrative of it. Because AI is so generic, there is no clear specialized use case, like when Salesforce invented the CRM for example.

That’s not the argument though. The argument is that conversion rates as per OpenAI are about 5% and to serve the other 95% you need to build significant infrastructure that costs hundreds of billions annually. So for every white collar worker that you know and uses it and pays for it there are 20 free loaders. And mind you, 5% conversion rate is extremely high already as a number per se. It won't magically reach 20% in a couple of years. Chances are it will fall particularly for the enterprise segment due to the advent of the Chinese models.

Currently, a $20/month openai subscription gives roughly $400 in codex api credits. That doesn’t count what you can get from the web chatbot.

So it better be that api tokens are seriously overpriced. There is value at $20/month. I am not so sure if it’s $400/month or more.

using how?

After using it a bit I’m convinced it’s not, as a whole, a bubble.

Bubbles exist around it. Data center construction may end up overbuilding, much like the dark fiber thing during dot.com, since better chips and models will shrink power and space requirements over time.

But the core tech is the most powerful new thing I have seen since discovering the Internet, at least. Maybe more.

Hah instantly knew it was a Patrick Boyle video. He's a well-known expert in rap music that also does finance on the side.

That does not explain the buy recommendations for SpaceX

>> when his bonus depends on his not understanding it

As he explains here: https://youtu.be/NufJ7g63KSY?t=1233