I told Lee that artificial intelligence might be the most overfunded "free product" in modern business. We both use AI tools every day, and like most people, we don't pay a dime. That's the problem. Trillions have been spent on data centers, chips, and training models, yet the vast majority of users aren't customers. Venture-backed firms like OpenAI and Anthropic depend on free traffic and vague enterprise plans.
The theory is basically this - AI is mostly free. Huge majority of the people, more than 99 out of a hundred people use it every day for free. And there really aren't any other business models that exist, that have been successful, incredibly successful for years and years and years don't have a large number of paying customers. Either millions of people paying you know, sort of some money, maybe it's $10.
Sexual content was a top draw for AI tools almost as soon as the boom in AI-generated imagery and words erupted in 2022. But the companies that were early to embrace mature AI also encountered legal and societal minefields and harmful abuse as a growing number of people have turned to the technology for companionship or titillation. Will a sexier ChatGPT be different?
Right now, AI feels like Christmas morning every day. ChatGPT helps app designers fill wireframes with microcopy. Midjourney conjures up mood boards from thin air. Claude can debug web developers' wonky code faster than you can say "syntax error". It's intoxicating, productivity-enhancing, mostly free stuff. (See here how AI is impacting graphic design.) But let's be realistic: this golden age is as sustainable as a chocolate teapot.
