Generation AI

Business Models for AI: Who Pays for the Revolution?

Episode Summary

In this episode of Generation AI, hosts JC Bonilla and Ardis Kadiu explore the complex world of business models for artificial intelligence products and services. They discuss recent developments with Google and OpenAI, and break down the various pricing strategies being employed, from free access to premium subscriptions. Ardis shares insights from his experience building AI into Element's higher ed CRM platform. The conversation covers key considerations for monetizing AI, including understanding customer needs, value creation, and strategic pricing. JC outlines eight potential business models, from "AI-first" paradigms to open source approaches. This episode is a must-listen for anyone looking to understand the financial side of the AI revolution.

Episode Notes

In this episode of Generation AI, hosts JC Bonilla and Ardis Kadiu explore the complex world of business models for artificial intelligence products and services. They discuss recent developments with Google and OpenAI, and break down the various pricing strategies being employed, from free access to premium subscriptions. Ardis shares insights from his experience building AI into Element's higher ed CRM platform. The conversation covers key considerations for monetizing AI, including understanding customer needs, value creation, and strategic pricing. JC outlines eight potential business models, from "AI-first" paradigms to open source approaches. This episode is a must-listen for anyone looking to understand the financial side of the AI revolution.

Introduction (00:00:00)

• JC opens the episode and introduces the topic of AI business models
• Ardis comments on JC's hosting skills

Google and OpenAI News (00:02:13)

• OpenAI makes ChatGPT accessible without an account
• Discussion of OpenAI's motivations and competition with Google
• Google introduces generative search and the changing user behavior
• Comparison of Google and OpenAI's business models

Business Model Fundamentals (00:07:27)

• Three key aspects: customer needs, value creation, pricing
• How Ardis approached the business model for Element
• Balancing cost and differentiators in pricing

Macro Forces in Business Models (00:10:21)

• Subscription pricing, consumption pricing, and embedded pricing
• How Element approaches pricing for its AI features
• Comparison to other AI-powered business tools

AI Business Models in the CRM Space (00:14:17)

• Impact of generative AI on SaaS pricing
• Microsoft Copilot, Google Gemini, Salesforce Einstein pricing
• Element's approach to embedding AI without additional costs

Eight AI Business Models (00:17:14)

• "AI-First" Paradigm: Embracing AI as a core venture
• Subscription Model: AI as a service with scalable pricing
• Feedback Loop Model: Personalization improves with usage
• Ecosystem Model: Interconnected solutions and diversified revenue
• Global Solutions, Local Partners: Transfer learning across regions
• Open Source Models: Community collaboration and customization
• Uncharted Territories: Adapting and evolving models like Slack

Element's AI Strategy (00:42:45)

• Building AI into the platform and figuring out monetization
• Aligning technology costs with delivered value over time
• Excitement for upcoming developments and need for more discussion

Conclusion (00:44:39)

• Recap of the eight business model variations discussed
• Call to action for listeners to consider AI pricing from both consumer and business perspectives
• Ardis signs off and plugs the Enrollify podcast network