AI Startups Are Trying to Make Usage-Based Pricing Happen

Tech waves have often brought along with them corresponding changes in business and pricing models. For instance, when companies moved from using servers in their own data centers to ones hosted by public cloud providers, they also switched from buying packaged software a la carte to subscribing to cloud-based software, leading to the much-loved SaaS model we see today.

Now, VCs are telling me that they’re seeing similar rumblings with the latest wave of AI startups. Specifically, I’ve noticed that a number of these startups are experimenting with different business models.

Just a few examples: Generative AI startup Cresta, which started out charging on a per-user basis, has pivoted to instead charging for every conversation its AI agent helps contact center employees with. Meanwhile, customer service company Intercom released its AI chatbot Fin in March, which is priced at 99 cents for every customer request it’s able to resolve. That’s at odds with its core customer service product, which charges per user. And Hume, a Union Square Ventures-backed startup that uses AI to analyze changes in people’s emotions based on voice intonation and facial expressions, charges per minute, annotation and word.