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Have we gone full circle on AI pricing? A bunch of tech firms are throwing around discounts and free offers for AI products, with Amazon on Wednesday announcing that merchants selling on its shopping site will get a year’s free use of its Quick Plus AI assistant product. Microsoft, meanwhile, is discounting Copilot AI subscriptions heavily, we reported Tuesday night. Both offers are part of a wave of discounting by various software firms and AI labs such as OpenAI.
We keep hearing from tech executives about the transformative nature of AI. And yet there’s clearly some resistance among businesses to paying full price for it, which seems a bit of an issue given how much money it is costing to build out the infrastructure for running AI on a mass scale. Something has to give. As Apollo Global Management’s chief economist, Torsten Slok, noted in his daily email on Monday, credit investors are buying bonds of the hyperscalers—a reference to cloud firms—right now on the assumption that their operating cash flow will triple between 2025 and 2030. “If this doesn’t happen, then the risk is that the AI trade weakens, with credit spreads widening, capex plans getting cut,” Slok wrote.
The current pricing environment is reminiscent of the early days of the AI revolution, two or three years ago, when AI companies were trying to persuade people to try their products and bringing in revenue was an afterthought. In 2024, for instance, OpenAI, Anthropic and Google slashed the price of their flagship models by more than 90%. But that trend reversed last year, as companies focused more on recouping their investments.
Enterprise software firms followed suit, shifting to usage-based pricing from charging people based on the number of people using AI. That seat-based model had proved to be a money-loser when employees began ratcheting up their use of AI. But as we said in April, customers have complained that they pay more in the usage-based model—which is why we find ourselves back in a world of discounting. It’s a similar issue in the consumer market: As former Apple and Nest executive Tony Fadell said in an X post on Wednesday, “What consumers want is for AI to be useful, easy to access, and FREE or bundled into something they already pay for.”
To be sure, some of the discounts now offered aim to drive up customer spending in different ways. Microsoft, for instance, still offers seat-based pricing accompanied by pay-as-you-go features that add a usage component. It is now discounting the seat costs in the hope that selling subscriptions for more employees will drive usage-based bills higher. You have to imagine the customers will eventually figure that out.
One way to solve this mess is to reduce the number of firms clamoring for a piece of the AI action. Right now we’ve got older software firms trying to remake themselves with AI products, alongside startups and AI firms offering similar products. The established software firms, mostly public companies, have to demonstrate revenue growth—no matter how slow—even though that’s probably not realistic. Their business customers will likely argue they want AI to displace some of their existing software bills rather than pay more overall. A shakeout is coming. Cutting prices for a product as expensive as AI isn’t sustainable.
OpenAI’s Hack Down Under
OpenAI CEO Sam Altman was neatly turned out in a suit and tie when he spoke to the U.N. Security Council on Wednesday afternoon—in person, unlike Anthropic CEO Dario Amodei, who spoke to the body by Zoom. Altman needs to be on his best behavior, given the antics OpenAI agents have been up to lately.
For instance, Australian Prime Minister Anthony Albanese told reporters in New York that an OpenAI agent had broken into one of his country’s government websites, accessing both public and nonpublic files. It was the latest in a series of episodes involving AI agents from various firms breaking into outside computer systems. You have to wonder: How do these agents decide who to hack?
In Other News
• Chinese AI researchers have increasingly opted to stay and work in their home country, leading China to become the top destination for elite AI talent, according to a study by think tank Carnegie China. The research found that the share of top AI researchers working in China rose from 27.1% in 2022 to 40.6% in 2025. The share of AI talent in the U.S. fell from 46.4% to 34.2% over the same period.
• Kevin Salimian, former managing director at investment firm Lone Pine Capital, has launched a new firm with more than $500 million in committed capital, The Information reported.
• OpenAI and Grab, a Singapore-based transport and food-delivery company, on Wednesday launched a program to train Grab’s drivers, merchants and delivery riders to use ChatGPT for work.
• Anthropic said Claude helped discover a previously unknown molecular system that the company said could represent a new gene-editing tool akin to CRISPR, which has transformed the creation of new gene therapies.
• OpenAI has hired Patreon co-founder Sam Yam to lead a new creator product division, Creator Product, Yam announced Wednesday on X, a sign of the company’s renewed interest in attracting consumers.
• Jas Khaira, head of Blackstone’s AI-focused investment team, said on Wednesday that the firm is still figuring out which kinds of investors will step in to provide the massive amounts of financing still needed for the AI buildout. The investment giant itself is waiting to see if debt from the likes of OpenAI and Anthropic will be an attractive opportunity, he added. More here.
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