Cost of AI

One thing I don’t get about “AI everywhere”: the unit economics.

Why trade healthy margins for a per-click bill?

How software helps

People want a thing → people do the thing → provider pays people-hours.

People want a thing → software does the thing → users do the work with software.

Result: people-hour cost shifts off the provider.

What changes with AI

People want a thing → they go to software → software calls AI → AI responds.

Now you’re paying per use. COGS goes up.

Without AI: O(1) — build once, low server cost.

With AI: O(n) — every action incurs API cost.

And users will use it sub-optimally, so it gets worse.

An alternative

Build the AI for yourself and act like a services business on the outside.

Inside, you automate the work, iterate, and push COGS down over time.

The point

If AI isn’t necessary or doesn’t create asymmetric value for your users, you just moved from cost-per-build to cost-per-usage, and that breaks at scale.

If your numbers show AI lifting margin, post the model: AI COGS, ARPU, and what made it work.