How will AI vendors set prices CIOs want to pay? Clues are starting to emerge

One of the biggest debates around generative AI is how best to monetize it—and it's a question that, despite everyone's best efforts still does not have a definitive answer.

But if you bet on a model for front-end gen AI solutions based on gradual adoption of a hybrid pricing model - partly traditional subscription and partly usage-based pricing - the latest thinking on the problem suggests you might be doing a lot better than any hallucinating Large Language Model (LLM).

Under such a model, a gen AI cloud service company would charge different amounts per month for users based on their usage levels.

For example, a customer who uses a gen AI product below a certain usage threshold might be able to do so for free—but once the user exceeds that usage threshold, they may start paying a low monthly fee (e.g., $5 to $10).

When they ...