Consumer AI has had a busy week, with Meta's personal assistant Muse and its mascot Jolly proving a surprise hit, OpenAI releasing Dots, and the Instinct assistant reaching a $10 billion valuation on the strength of its agentic errand-running. But the underlying economics of selling AI to consumers remain difficult.
Andreessen Horowitz's semiannual State of Markets report, drawing on a PNC research report from this summer, tracked the slowly growing share of consumers paying for AI services and the slowly growing amounts they pay. As of May, 2.2% of consumers were paying for AI, at an average spend of $31 a month. Andreessen said it is "still so early when it comes to mature AI adoption and utilization," but the pace of growth in both charts appears awfully linear.
Bank of America offered similar figures in March, finding roughly 3% of U.S. consumers paid for AI, up 40% from the previous year. A Menlo survey from September found a quarter of adults use AI daily and half of those users are paying for it.
The problem with the consumer approach has less to do with revenue than with cost. AI is unusually expensive to operate compared with lightweight predecessors like social networking or cloud computing, and even hundreds of millions of paying customers does not guarantee breaking even.
OpenAI has adapted, with its widely reported pivot to enterprise largely successful and enterprise bookings reportedly doubling since July. Meta has personalised ad targeting behind Muse and is already exploring the enterprise angle, while Instinct plans to take a cut of purchases made through its agent.