The ugly economics of consumer AI

Consumer AI products have recently seen renewed interest, with several new personal assistants and agentic AI tools gaining traction. However, the underlying economics remain problematic: only a small percentage of consumers currently pay for AI services, and they pay relatively modest amounts, while AI technology is expensive to operate compared to other online services. Major AI labs have largely pivoted toward enterprise customers rather than pursuing consumer markets directly, since consumer revenue alone cannot cover the high costs of running these systems.