June 7, 2026

The economics matter (duh)

There’s a phrase I often find myself using when having a conversation with someone about AI:

“If it disappeared tomorrow, it wouldn’t really care.“

And that’s true, even though I use AI in a variety of forms and for various use cases pretty much every day.

But...

Could AI actually disappear tomorrow?

I mean, the biggest companies on the planet are pouring billions into building, distributing, and promoting the technology.

How could it possibly disappear?

Simple.

It could end up being more expensive than hiring a person.

As OpenAI prepares for its IPO, news is leaking that it’s incredibly expensive for these frontier companies to process requests on behalf of their users.

Sure, their costs could get cheaper over time, but the numbers I saw this morning (presumably based on OpenAI’s S-1 disclosure) indicate that ChatGPT (and probably Claude) users are being subsidized something like 100 to 1 by VC dollars.

In other words, once the VC money stops coming in, their prices for end users will have to go up at least 10x.

Let’s do some math...

My monthly AI spend has been hovering around $500 since the beginning of the year.

If that goes up 10x, it would be REALLY hard to justify.

If it goes up 100x?

It will effectively disappear.

Yours,

—J