HACKER Q&A
📣 __01000010

Is the freemium model the future for AI-platforms?


Due to the associated costs of integrating LLMs into products, many services rely on free trials that convert into monthly subscription plans. Does it make sense to introduce something in-between?

For example, after having used the Cursor IDE, I'm still hesitant to pay for a subscription. If Cursor offered a freemium model supported by ads, e.g., in the chat tab, I would gladly tolerate them to use the service for free.

Function calling agents are only getting smarted and can be configured to determine the relevant moments to serve ads during interactions, using high-level contextual + demographic information. Also, ads would be showcased separately from the LLM's response, with clear messaging to as why they were shown.

Does this approach make sense? Could it make freemium models sustainable without much disruption to the user experience?

The visuals on my website is the only way to fully articulate this idea. Feedback would be much appreciated.

https://promptly-mvp-589d2.web.app/

  👤 Vampiero Accepted Answer ✓
Nah it's unsustainable, right now it only works because of the hype. AI doesn't generate nearly enough value to be worth what it's being sold for. And it costs even more to run.

What will ads even do in that context? At the very least you need to get your users to accept that all of their data WILL be used for analytics and sold to 500 different companies. And it might not even be enough to pay for the cloud costs

👤 cowsup
Advertisements have helped finance the web for decades. AI could be no different.

What type of advertisers would want to advertise next to an AI chat window? How often would ads show? Would the users still enjoy using the platform if you showed enough ads to offset the cost of running the service?

Lot of questions that all boil down to "it depends." None of the big players want to dilute their product with ads (yet). But I definitely think some will be willing.

👤 mfdupuis
Are you looking to validate a market idea? If so, are you thinking of more of a consumer use case? You mentioned Cursor, so it sound like you're maybe thinking more enterprise, but embedded ads are basically not a thing in the enterprise. Most solutions offer freemium mostly as a loss-leader, but this isn't AI specific IMO.