The bull case is easy to make. Agentic AI has finally gotten reliable enough to handle everyday tasks. Companies are increasingly pitching that service to everyday people, who are getting genuine value out of it. If you\u2019re an investor, that looks an awful lot like the ChatGPT launch in 2022 \u2014 the raw power of AI opening up a product category that was never possible before. Who wouldn\u2019t want a piece of the action?<\/p>\n
But there\u2019s a reason frontier labs have gotten gun-shy about consumer AI \u2014 and it\u2019s not because the tech isn\u2019t good enough. Even staggeringly popular tech products are starting to hit a ceiling on how much money consumers are willing to pay, and it\u2019s not clear that better models are actually leading to a more profitable consumer business. The result has been an industry-wide shift toward the Anthropic model, focusing on enterprise contracts and vertical-by-vertical expansion.<\/p>\n
If products like Muse and Instinct are bucking that trend, it\u2019s because they\u2019re less concerned with monetization. But the underlying economics of consumer AI are not getting any better, and anyone getting into the business will have to grapple with them eventually.<\/p>\n
We got a reminder of those economics in Andreessen Horowitz\u2019s semiannual State of Markets report<\/a>, which pulled its figures from a PNC research report<\/a> from this summer. In two charts, they track the slowly growing percentage of consumers paying for AI services, alongside the slowly growing amount they\u2019re paying. As of May, 2.2% of consumers were paying for AI, at an average spend of $31 a month.<\/p>\n Andreessen puts a positive spin on this, saying, \u201cit\u2019s still so early when it comes to mature AI adoption and utilization.\u201d There\u2019s a lot of room to grow! But in both charts, the pace of growth seems awfully linear. Even as models make huge improvements, there isn\u2019t a ton of movement in the number of customers willing to pay for AI or how much they\u2019re willing to pay for it. The enormous performance jump from GPT-5.2 to Astra, for instance, is barely visible on the chart.<\/p>\n The per-consumer numbers are less striking, but still far below the standard break-even point. If you take Netflix as the standard for market-saturated online services (at 325 million subscribers), then $34 per customer only gets you to $11 billion in annual revenue, less than a third of OpenAI\u2019s operating costs<\/a>.\u00a0<\/p>\n If you think PNC is underselling adoption, you can get similar numbers from Bank of America<\/a>. In March, the firm found that roughly 3% of U.S. consumers paid for AI, up 40% from the previous year. A Menlo survey from September<\/a> gives a slightly sunnier view, finding that a quarter of adults use AI daily and half of those users are paying for it.<\/p>\n The problem with the consumer approach has less to do with revenue than with cost. AI is an unusually expensive technology to operate, particularly compared to lightweight predecessors like social networking or cloud computing. Even hundreds of millions of paying customers doesn\u2019t guarantee you\u2019ll break even.<\/p>\n To its credit, OpenAI seems to have adapted well to these facts. The company\u2019s widely reported<\/a> pivot to enterprise has been largely successful, with enterprise bookings reportedly doubling<\/a> since July. Even the Dots launch had a strong enterprise angle, showing how the new personal agent could be useful for software engineers and agency creatives. One long-standing way to make money from popular-but-cheap consumer services is to sell them to businesses at a markup, and OpenAI seems to be following the playbook.<\/p>\n It\u2019s harder to say what this means for Muse and Instinct. Muse has the juggernaut of Meta\u2019s personalized ad targeting behind it, which gives it more options for monetization and more time before it becomes an urgent question. Notably, Meta is already exploring the enterprise angle<\/a>.<\/p>\n![\"\"\/](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/09\/https:\/\/substack-post-media.s3.amazonaws.com\/public\/images\/1edf2a25-55c4-4eb8-810a-bb5ebc4cdd92_2000.webp\")
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