AI pricing subsidy era ends as inference costs rise instead of falling
By
arnon
Hand-rolled, kettle-boiled, baked to perfection. Worth every minute at the bakery.
Summary
The article discusses the end of the "AI subsidy era" where companies offered AI features at flat-rate or low prices based on the assumption that inference costs would keep falling. Instead, costs are rising, leading to consequences like Microsoft canceling internal Claude Code licenses, Uber blowing through its 2026 AI budget in four months, and GitHub dropping flat-rate plans. The piece argues that current AI pricing models were unsustainable and are now being corrected as the cost curve bends in the wrong direction.
Key quotes
· 3 pulledThe current AI pricing was always going to go away. It just doesn't make sense.
You'll see the framing 'the AI subsidy era is ending' which is a polite way of what everyone's been doing when they slap AI features into every tier of their product on a bet that inference costs would keep falling.
They didn't and the cost curve is bending the wrong way.
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