Why many AI companies are shifting from consumers to businesses

In short: Consumer AI assistants are getting popular again, but many AI companies still find it hard to make steady profits from everyday users.

What's going on

Several consumer AI assistants have gained attention recently. Meta’s Muse is seeing strong uptake, OpenAI just launched Dots, and the assistant Instinct reached a reported $10 billion valuation.

These tools are often described as “agentic” AI, meaning they can do errands for you, like booking travel or making reservations (like a digital assistant that can click buttons for you). The pitch is simple. If the assistant saves time, people will use it.

The challenge is money. A State of Markets report from Andreessen Horowitz, using figures from a PNC research report, found that as of May only 2.2% of consumers were paying for AI services. Those who paid spent an average of $31 a month.

Even if those numbers grow, running AI can be expensive. Unlike a social app, an AI assistant can cost a lot each time it answers, because it uses heavy computing power (think of it like running a small engine every time you ask a question). TechCrunch notes that even very large consumer subscription businesses may not bring in enough revenue to cover the biggest AI labs’ operating costs.

Because of this, many leading AI companies are putting more energy into selling to businesses, where prices can be higher. OpenAI, for example, has been leaning into enterprise deals, and its enterprise bookings have reportedly surged.

What to watch

Watch whether consumer assistants add new ways to make money besides subscriptions, like ads, fees on purchases, or paid business versions. Otherwise, even popular consumer AI apps may eventually need enterprise revenue to keep growing.

Source: TechCrunch AI