Who pays for AI? - Daire MacFadden / Financial Times

Financial Times: For three years, the AI investment story has gone something like this. Frontier AI model-makers such as Anthropic and OpenAI provided their products at well below cost, in the form of consumer-facing chatbots, allowing users to burn through the most precious commodity in the AI supply chain: compute capacity. AI users lived a subsidised existence while investors happily picked up the bill, as each successive fundraising round increased their paper gains (old heads will hear the echo of the eyeball- and click-based valuations at the turn of the millennium).

My Opinion: As American AI companies limit free usage, and start usage based pricing, the cost to both personal and business customers go up. They have to raise prices for profitability. But as the most advanced AI models have similar capabilities, users can choose the lowest cost models. Some users are then switching to open and cheap AI models from China.

And a stock market correction is possibly underway. Most impacted are AI ecosystem companies like ASML in Netherlands, TSMC in Taiwan, and SK Hynix in South Korea.

I think the AI industry will deliver returns for their investors and buyers. But there will be survival of the fitest. Where companies will struggle to increase both sales and profits. And if software companies are investing trillions of dollars, eventually someone will have to pay for it. That means consumers and businesses.