The ugly economics of consumer AI

Instinct has a separate plan that involves taking a cut of purchases made through the agent, which might raise the ceiling. Presumably it’ll also be able to avoid the cost of training a frontier model, which will help a lot.

But the ugly economics of consumer AI put a hard cap on how large the company can plausibly grow without tapping into enterprise revenue. It’s a lesson the major labs have already learned, and it’s one of the few things about the industry that doesn’t seem to be changing.