How Much Should Consumers Pay For AI?

If the last month of AI product updates has demonstrated anything, it’s that AI firms are diverging meaningfully in their pricing strategies.

On one hand, we have companies like Google, whose new “Flash” model drew droves of price-sensitive developers looking for an uber-cheap yet still high-quality alternative. And on the other hand, we have OpenAI, which last month announced both a “pro” version of its chatbot that costs 10 times as much as the current premium version of ChatGPT and a preview of its latest o3 “reasoning” model that cost more than $1,000 to do a single task during an evaluation. (And OpenAI CEO Sam Altman recently said that the expensive “pro” version of its chatbot is actually losing the company money.)

OpenAI isn’t the only one forcing developers to pay up: last month, Cognition finally made its AI coding assistant Devin widely available after months of hype for a whopping $500 per month subscription. That’s a lot more expensive than offerings from other popular AI coding startups like Cursor, which costs just $20 per month.