No one knows how to price AI tools
Subscribe to enjoy similar stories. More than two years after the public debut of ChatGPT, software companies still haven’t found a compelling way of charging for AI tools, chief information officers say. Now they’re trying new strategies.
In the last couple years, vendors have typically charged a monthly fee per user for AI features, assistants and copilots, much like they price other software as a service. But AI’s high compute demands meant they needed to charge eyebrow-raising prices to cover the cost of delivering the service. For example, some chief information officers balked at paying $30 per user per month to add Microsoft’s AI Copilot to its 365 productivity suite, a 60% premium to the top level of 365 without AI.
“A year ago everything was way overpriced," said Greg Meyers, chief digital and technology officer of Bristol Myers Squibb. “Most companies overestimated how much more we would be willing to pay for an AI feature." The emergence of models like DeepSeek’s R1, which the Chinese company said it trained for a fraction of the cost of leading U.S. models, could help drive AI costs down over time.
But in the meantime, CIOs remain in a tough spot. Google said the Business Standard plan for its Workspace suite would shift to a $14 per person per month package with Gemini AI features baked in. “We’re in a place where prices are high and simultaneously companies are trying to understand how to drive value out of it," said United Airlines chief information officer Jason Birnbaum.
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