Earnings will show a different path to ROI for AI
By Alan Jacobson, Systems Architect & Analyst
- Subscriptions cannot deliver ROI: More than 95% of users do not pay, do not convert to paid and are unlikely to pay for something they get now for free.
- Advertising cannot deliver ROI: Unlike social platforms, AI cost does not decline per user with scale. In addition, more than 90% of AI users are outside the U.S., where ad revenue per user is low.
There is only one durable path to ROI
- Reduce cost through optimization, not scale
- Increase revenue by charging for compute, not flat-rate subscriptions or token counts
- Increase adoption by building trust: eliminating hallucinations and providing user-level governance
Think of this as AI 2.0, which will make dollars and sense.