AI may never be as cheap as it is today

The era of cheap artificial intelligence (AI) may end as AI companies, including OpenAI and Anthropic, are expected to raise prices to achieve profitability before anticipated Initial Public Offerings (IPOs). These companies currently operate with negative margins, with OpenAI projected to burn $14 billion in 2026 and Anthropic's margins pressured by higher-than-expected inference costs despite a swing from -94% in 2024 to approximately +40% in 2025. This pricing strategy mirrors past practices by companies like Amazon and Uber, which initially offered low prices subsidized by venture capital. Public investors will demand earnings growth and expanding margins, indicating that while AI costs may continue to decrease, total customer spending will need to increase for AI companies to become profitable and provide investor returns.