The latest articles on Forem by Mashrur Rahman (@mashrurio). https://forem.com/mashrurio https://media2.dev.to/dynamic/image/width=90,height=90,fit=cover,gravity=auto,format=auto/https:%2F%2Fdev-to-uploads.s3.amazonaws.com%2Fuploads%2Fuser%2Fprofile_image%2F331113%2F99bb9017-c83a-455d-8ff7-39b07f4e6425.png https://forem.com/mashrurio en Mashrur Rahman Thu, 11 Sep 2025 04:25:32 +0000 https://forem.com/mashrurio/cost-of-ai-2og2 https://forem.com/mashrurio/cost-of-ai-2og2 <p>One thing I don’t get about “AI everywhere”: the unit economics. </p> <p>Why trade healthy margins for a per-click bill?</p> <p>How software helps</p> <p>People want a thing → people do the thing → provider pays people-hours. </p> <p>People want a thing → software does the thing → users do the work with software. </p> <p>Result: people-hour cost shifts off the provider.</p> <p>What changes with AI</p> <p>People want a thing → they go to software → software calls AI → AI responds. </p> <p>Now you’re paying per use. COGS goes up.</p> <p>Without AI: O(1) — build once, low server cost. </p> <p>With AI: O(n) — every action incurs API cost. </p> <p>And users will use it sub-optimally, so it gets worse.</p> <p>An alternative</p> <p>Build the AI for yourself and act like a services business on the outside. </p> <p>Inside, you automate the work, iterate, and push COGS down over time.</p> <p>The point</p> <p>If AI isn’t necessary or doesn’t create asymmetric value for your users, you just moved from cost-per-build to cost-per-usage, and that breaks at scale.</p> <p>If your numbers show AI lifting margin, post the model: AI COGS, ARPU, and what made it work.</p> ai discuss saas