The Vibes-Based Pricing of "Pro" AI Software

0:01Hey, this is Mike. Before we start, I'm going to share some exciting news with you. We're doing a live show in San Francisco on September 9th in partnership with the local station KQED. Lauren and I will sit down with our editor-in-chief, Katie Drummond, and we will have a special guest joining us for a conversation that you will not want to miss. You can use the link in the show notes to grab a ticket and invite a friend. We cannot wait to see you there. Hey, Lauren. How are you doing? I'm sorry. What's your name again? You've been gone for so long. I've been snorkeling on the moon. I miss you a lot.

0:37I missed you too. Oh, thank you. How was the show? The show has been not the same. Just not the same. We ran a rerun of our episode about Brian Johnson paired with our wellness package on wire.com. Perfect. So that was really fun. You know what? Things have been okay, but I missed you. I have to say that. How was your vacation? It was lovely. I couldn't wait to get back here in the chair behind the microphone, though. I don't believe that. Did you eat butter? No. In honor of Katie? I did not. Are you going to tell the folks what you did for vacation? I went snorkeling on the moon. Incredible. It really was.

1:15Wow. Did you post it to the gram? Wow. I'm impressed. Okay. Well, you chose a good week to come back because it's model week. Lots of models here. There's models here? We're going to talk about models. Excuse me? Your eyes just lit up. I mean, are they hiding behind the magazines? I don't see any models. I hate to break it to you. We're going to talk about some really nerdy stuff. These are AI models. Oh, okay. It's a big week for OpenAI, by the way. They released two new open weight models earlier this week. These are models that have set parameters around them, but they also give developers a little bit more access to the inner workings of them so they can, like, tinker with them and build on them and stuff like that.

1:55Okay. And then a lot of folks are excited this week about GPT-5. GPT-5. Yeah, which is coming out. And that's a big batch of releases. I imagine that we're going to go hands-on with them at some point. We are. Yeah, one of our colleagues, Reese Rogers, is planning on putting GPT-5 to the test. And just before this, he was doing some tests of these really expensive AI services, like$200 per month. Ah, yes. The top tier ones that cost, yes,$200,$250 a month. Yeah. Like ChatGPT Pro, and then there's Claude Max, and there's so many more. Yeah. And we are very lucky to have Reese here on the show with us today to tell us about them.

2:38Howdy, howdy. Thanks for having me today. And, of course, a big welcome back to my... Thank you. Thank you. I wasn't gone that long, guys. But seriously, thank you. I very much appreciate it. So, Rhys, I'm really glad you're here today because the services that we're going to be talking about are a far cry from the$10 a month,$20 a month subscriptions that people are used to paying for things like streaming music, streaming video, cloud storage. We are officially now in the era of the$200 per month software subscription. So real quick, before we get started, what is the craziest request that you've processed using a pro-level AI subscription?

3:18And was it worth it? Yes, this definitely isn't anywhere near close to your Netflix subscription cost. But yes, using OpenAI's$200 pro plan when the ChatGPT agent first dropped, I tested the guardrails to see whether it would shop on an adult website and see how good its picks were. And let's just say I didn't get any of the toys. Wait, wait. Okay. By picks, you don't mean picks like photos. You mean picks like picking up products for you. Yes. I wanted to see, you know, what kind of products it would do. And it searched for about 20 minutes and it picked some all right things. What did it pick?

3:54No, I actually. This is a family podcast. This is a family podcast. If your kids are in the car. Is this too much? Turn it off right now. No, tell us. What did it pick? I mean, it just picked a lot of cock rings. So I feel like I can't say that. But you can totally say that.

4:15This is Wired's Uncanny Valley, a show about the people, power, and influence of Silicon Valley. Today, we're talking about why some chatbot subscriptions are so expensive. Whether it's ChatGPT Pro or Claude Max, these premium subscriptions often cost around$200 a month with the promise that if you pay top dollar, you'll get access to the most powerful models these companies can provide. But why the AI companies have settled on this price range for their chatbots is less clear. Wired's Reese Rogers went looking for answers and he found that these premium prices were determined on vibes more than anything substantial.

4:53But this vibes-based pricing reveals a lot about how AI companies are thinking about the future of their profitability and how they're hoping that users and companies will increasingly rely on these products. I'm Michael Colori, Director of Consumer Tech and Culture. I'm Lauren Good. I'm a senior correspondent. And I'm Rhys Rogers, a staff writer who focuses on software. So, Rhys and Lauren, let's get started by first going through the AI services that we're actually talking about here. Yes, so we've already briefly mentioned OpenAI's ChatGPT Pro, which is$200 a month and was the first one to come out.

5:29In April of this year, Anthropic also dropped their Cloud Max plan, which has a$200 monthly option. They promote Cloud Max as having way more usage per session than previous versions. And this is really aimed at coders. Coders love Cloud. Google also, not to be left out, got into the game not too long after with their AI Ultra plan. This one's a little bit more expensive at$250, but you get 30 terabytes of storage. and a few other perks. So that's really leaning into the Google Cloud services of it all. Storage as in like just your Google Cloud account, like your drive and your photos and things like that, plus this super smart chatbot.

6:12Google's like, we have everything. Let's just throw the whole book at them. And then on the smaller end, there's Cursor, which is well-known for AI-assisted coding. They have a$200 plan. And Perplexity, which is a fairly popular startup that's racing to become the Google of AI era kind of AI search. They also released a premium version called Perplexity Max, which surprisingly,$200 a month. So if you're like thinking about what do these have in common? New features usually come to the most expensive tier first. So if you're not paying for the models, you're not getting the newest features as soon as they come out.

6:53Also, these premium products are often advertised as the most powerful version of these companies' models, sometimes with even like special models just for the pro users. So you're getting unlimited access almost to as many prompts as you want. And a lot of people do want that, that are power users. Though this can be quite expensive for the companies that are providing them. Yeah, we're gonna talk about that later on the show too. When you say prompts, I just wanna make clear for folks, I think a lot of our listeners have used these services, but like basically it's a query, it's a search. It's like imagine if in the era of Google search in the early days, Google started charging you per query that you were putting in.

7:32And some of your search results came back kind of slow and others came back much more quickly because you were paying for access to that premium service. Absolutely. It's that, but now it's generative AI responses. And it's also coders sitting on their computer for 10 hours a day using the tool the whole time. Oh, yeah. They're all about the code gen. So this is really about the power users who want to sit there and they want to use the AI all day long, potentially, and get the most powerful version. Reese, there's one that you didn't mention. Grok. How could I forget? Elon Musk's Grok. It's actually one of the craziest out there.

8:09It's$300 per month. It's also the weirdest. Yes. One of our colleagues gave it a spin and the chatbot was kind of flirty and suggestive and weird. There are special settings within Grok where you can interact with custom characters designed for kind of like flirtatious chatter. It's like the fever dream of a billionaire who's—anyway. You know, it's interesting because we also wrote a story on Wired.com earlier this month about how the chatbot went off the rails and was spewing anti-Semitic content. It's kind of wild, and I think this is a good example of how the culture of different companies can be reflected in their consumer-facing products.

8:50And maybe it's indicative of how some of them are putting a certain price point on them and saying they're quote-unquote premium, but premium becomes a little bit subjective. Like, what is actually high quality? Mm-hmm. Yes, and I don't know if I would consider Grok's output to be the highest of high quality, definitely, with what we've learned throughout our reporting. I think the XAI's Super Grok plan is$300, and they're really leaning into what most people consider to be one of the more toxic aspects of AI chatbots right now, which is this kind of sexy AI element. You know, with OpenAI's Pro plan, I was really trying to dig at the edge of the guardrails and what it would allow me to do.

9:34But if you log into Grok and you're using the highest tier plan there, you don't even have to push at the guardrails to get these very adult X-rated answers out of the tool. It even advertises having a not safe for work mode. So I think Grok's anime girl companion, she's designed to entice. She twirls around. She shows off her underwear. It's targeted at this male user base. That's probably pretty online, very lonely, and unfortunately quite comfortable with the objectification of women. So when I think about XAI, it's taken a very different approach. I mean, if you compare it to OpenAI right now, they keep talking about how they're not optimizing for engagement.

10:22And they're actually kind of exploring more avenues for potentially protecting users or not really leaning into these stickier, grosser aspects of the chatbots. So they all have different objectives, but they all have around the same price. Like$200 seems to be the price that most of the companies are zeroing in on, and some are charging a little bit more than that. And Reese, one of the main things that you wanted to find out when you went in to test all of these top tier subscriptions is why they had settled on this price range. Like, does$200 make sense? So what did you find? Is$200 the level where AI companies can make real money?

11:03No. I just want to get that out of the way. Thanks for listening to our show, folks. That's it for today. You know, when I go into a reporting project, you sometimes think it's going to be a complicated answer, that there's going to be tons of nuance. And I think reporting this one out, it really was that OpenAI CEO Sam Altman decided on the$200 price tag when they were the first movers on this top tier space. And everyone just kind of followed that price range. He was even open that they weren't at launch making money on this. and I haven't gotten any other information to suggest that they are now making a profit because these generative AI tools are resource intensive to run.

11:46They're quite costly with startups rapidly burning through cash. But much like how OpenAI defined the consumer market for chatbots with the release of ChatGPT, Altman's$200 price tier for ChatGPT Pro was copied by everyone else. though it is super critical to note, as I answered at the beginning, like none of these companies I talked with spoke about making a profit off of these plans at the$200 price tag. Reese, you and I actually had a pretty interesting call with Anthropic for this story and asked this product manager various ways how they landed on this price point and couldn't really get a clear answer.

12:27And we weren't sure whether that was because this product manager wasn't at the level where they could sort of speak to those executive decisions. Or if it was because it is a giant shruggy in the industry, let's just see, let's, let's, you know, we're sort of fast following everyone else here and let's just see like what we can get. And also let's maybe start to inure consumers to this idea or prosumers to this idea that they're going to have to pay a lot more for software. Yeah. And Lauren, you tried to ask them every way possible and you're getting nothing back. None of those financial decisions were going to be revealed.

13:03Yeah, those prompts would have been very costly because I just kept sending them in. So all of the AI companies are billing these top tier chatbot subscriptions as far superior to the free versions or the ones that cost like one tenth of the price. You've used most of them. And I want to ask, do they live up to the hype? Are they worth the money? It really depends on who you ask. If you're a power user, especially a software developer or other nerd living in San Francisco, it could very much be worth it for you to have access to these capabilities that you can use as much as you want, basically.

13:42But if you're an average user, it's probably very tough to justify spending that amount of money on one subscription, really, for anything. I spoke with Allie K. Miller for this reporting. She's an influential business consultant. If you see a business going AI first, I bet she's whispered to them. So she's used all these really expensive plans, and she sorts who actually pays the$200 into two core groups. First, you have the faction of Silicon Valley insiders who want to feel like new world explorers. They got money to burn, and they just want to try it out and kind of seem cool in their social circle.

14:22This is the glass holes. These are the people who bought the Apple Vision Pro. But then the second and potentially larger group are those who believe they're getting their money's worth. They're getting a return on the investment. They're building software. They're developing an app. Or maybe even in Perplexity's case, they say that a lot of the people paying for their$200 a month plan are professionals. potentially financial people or investment bankers who want to stay up to date with very rapid information. So I think there's a large swath of people that are using these and are very happy paying$200 a month.

15:02But at the same time, it's not broken out into the mainstream. The average person is not paying$200 a month for a chatbot, but these companies are hoping that these premium features, these more potentially powerful models that are coming out, they hope that they will eventually be able to get a larger adoption rate from people who could see these as actually instrumental to their daily decision making. It's interesting that you mentioned Google's bundle earlier, because that to me just seems to make the most sense. So if you're open AI, you must be thinking about the various products and services that you can offer right now to build out kind of a suite in order to get people in.

15:45So you're not just telling them, you know, you get this super smart, fast reasoning version of ChatGPT. Okay, great. But maybe you also get email. You also get deep research. You also get that, you know, like, I don't know, something that does your laundry for you. But you have to be, you have to be thinking that way. Absolutely. I mean, one of their recent releases is saying that they can make slide decks and Excel sheets within their AI tool showing that they're looking to expand beyond just a question and answer chatbot format. I know a woman who is paying for one of the expensive chatbots.

16:20I'm pretty sure it's ChatGPT. And she was telling me about how she had to do some personal finance. She gave it a list of the different credit cards that she uses and how to go look up their APYs and their different points and perks and then gave it her monthly expense, gave the ChatGPT her monthly expenses. and basically said, which card should I allocate these expenses to in order to make the most money? She said it was fantastic. It basically saved her what she'd spent on the software. Wow. That was a hyper-specific example. No. I mean, that's going back to the Anthropic conversation. The Anthropic product person also mentioned that they had used it to decide what kind of mortgage they wanted for their house.

17:02And they said they saved more than$200 a month of that decision. Yeah. Incredible flex. Yeah. Working for Anthropic, living in San Francisco, median home price is what, over a million dollars? And like, well, I had to figure out that mortgage. So all of these are pretty fringe examples for sure. And Reese, like the$200 question is, are any of these worth it for the average person? It seems like the answer is no. I would say that not only does the average person not need one of these subscriptions, the business financials behind everything is so murky that I'm not even sure whether this$200 price tag will stick around for much longer.

17:45Oh, it's going to go up? It's going to go up, maybe. I don't know if these companies can even afford to offer these plans. So whether it might go up, but even at a higher price tier, it's unclear how much these cost. Wow. Well, Rhys, thank you for joining us today and walking us through it. Thank you so much. Always love my time in the Wired Library. We always love seeing the real Reese Rogers here, not the AI version. Thank you for having me. Let's take a quick break. But when we come back, Lauren and I will dive into how these premium subscriptions pencil out for the AI companies that are offering them and what these subscriptions mean for the rest of us.

18:35there's a reason millions of people start their day with morning brew daily each morning we break down the biggest news in business from the latest tech headlines to why nobody can afford a house right now all in a format that fits seamlessly into your day you'll leave each episode of morning brew daily smarter and ready to take on the world around you i'm toby howell and i'm neil freiman And we're ready to show you that business news doesn't have to be boring. So join us on Morning Brew Daily, available wherever you get your podcasts. Welcome back to Uncanny Valley. Today, we're talking about the AI premium chatbot subscriptions that are all 200 bucks a month or more.

19:13Wired's Reese Rogers was just with us and he was telling us about what they offer and why they're priced that way. And we'll get to the question of whether these chatbots can be adopted in a more mainstream level. But first, Lauren, were you surprised that these chat bot prices were mostly decided on vibes? Honestly, no. It didn't surprise me. I think Reese and I both went into reporting on this pretty optimistic that someone would pull back the curtain and tell us what was going on, share some of the economics behind it. But ultimately, it does really seem like it's vibes-based pricing. It's a little bit arbitrary.

19:48Yeah. You know, I think why that answer is so acceptable at this stage is just because it doesn't seem like it's feasible that any of them would make real money off of a handful of early adopters paying $200 per month. Yeah. These services are just all so expensive. You have the capital expenditure of these tech companies building the frontier models like Google, Meta, Microsoft, OpenAI, Anthropic. They're spending literally billions of dollars on infrastructure, talent, R &D. You know, for example, just because it's recent and Meta is a publicly traded company that's required to share its financials every quarter, Meta said it's expected to spend between$66 and$72 billion on AI infrastructure this year alone.

20:35That's up$30 billion from last year. This is the kind of spend that these companies have right now. It's expensive to provide these services. And even if these companies were able to convert more sort of everyday people into power users who are willing to pay multiple hundred dollars a month for AI access, it's a pretty tough sell. Like, it remains unclear, like, when that sort of actually nets out. Like, how long it would be. How many people they'd have to get into paying for that. Right. Before it actually makes sense. Yeah. I think a useful analog here is to think about ride sharing, right?

21:09Because when Uber and Lyft first came onto the scene, particularly here in San Francisco, they were involved in this price war. And you could take Ubers that seemed like ridiculously cheap, right? And we were all sort of figuring out in real time like, oh, they're subsidizing this because they want us to use their product. That's right. The VCs were basically subsidizing our lifestyles. I remember someone wrote an article about that. It might have been in Wired. Yes, it may have been you even. So there's this situation where companies have all of this money, and all they really need to do is get people to use it and get hooked on it and get reliant on it so that they can bring the price up over time.

21:44Or maybe they keep the price, like as you said, they are able to scale up to the point where they can keep the price exactly where they set it, just completely based on a hunch. Also, I think it's interesting that we're talking about the price of subscriptions because right now a lot of people are feeling subscription fatigue. right like you have subscribed to so many things that you probably could not count how many subscriptions you're paying out and most of those are around 20 bucks a month so the idea that something is 200 a month seems very expensive to you as an individual because you're already just like overwhelmed with how much money you're doling out for things you don't own and now it's everywhere in the corporate world you know you look at subscription licenses for pro level software and they're very expensive.

22:28So if you're a company and you're looking at paying a monthly subscription for software, $200 is not really that much, particularly for something that promises doing the work that human assistants could do. And that's way cheaper. What I hear you saying, though, is that there's still going to be a sticker shock for consumers who are used to paying$20 per month and the business users. Yes. They're spending so much money to make this AI. They really are. And I think it just goes back to what you said, that, you know, we all got, all of us as a society, as a, you know, a tech embracing society to some extent, got used to this idea that software is just meant to scale, scale, scale, and scale as quickly as possible.

23:11And it doesn't really quote unquote matter if the companies are profitable. Someday they might be, you're sort of making this future bet. And I think this is just the biggest future software bet we've probably ever lived through. Yeah. And I think a large component of that bet is the fact that the companies who are selling these subscriptions are also selling, like, they're selling a bargain to the company. Because they're saying, if you pay us$200 a month, you don't have to hire somebody to do your spreadsheets, to do your emails. Our colleague, Paresh Dabay, did a deep dive earlier this year where he found that AI chatbots could replace entry-level engineers.

23:47and as we've talked about on the show, there are AI agentic systems that can make sales calls. They can write software code. They can write all your emails for you. They can schedule everything for you in Slack. This is all work that was once done by humans now being done by a computer that you're only paying$200 a month for. Even just like not for accounting for any of the add-on features, that cost of hundreds of dollars a month is a fraction of what you pay for an assistant or a very junior level engineer. Right. Yeah, I mean, I think there are a few different things going on there with regards to jobs or replacing humans with AI.

24:28Yes, these services that are$200 per month are probably slightly underpriced if you are considering that versus hiring a human. Yes, AI is changing people's jobs right now in real time as we tape this podcast. And it's changing our jobs. It's changing everything. Do I think it is capable of fully replacing a human yet at most jobs? Not really. Not yet. I just spent some time reporting out a story about vibe coding and talked to a bunch of engineers, and a lot of them are using these Cogen or AI-assisted code tools, but they call them interns. They're still treating them like they have to manage something.

25:05They can't fully do the job yet. You know, some of them are still bullish on humans. The idea is that it's not going to replace 100 engineers. It's going to make a single engineer 100 times more productive. Do I agree with that? I don't know. I'm not a coder. But like, you know, this is the way that people are sort of doing mental gymnastics right now around AI. The other part of this, though, that I also think is true is that I think some employers who are laying off hordes of people right now because AI, I think it's bullshit. I think it's a very convenient excuse for them in the short term.

25:37In the long term, we are absolutely going to see, I think, disruption from jobs. And then I think people will look back at$200 per month software subscriptions and say, oh, remember the days when we were all paying just$200 for chatbots and talking about how expensive it was? And it's like when the first iPhone came out or something, right? Oh, God, I'd never spend that much on a phone. And now we all do because it's such an integral part of our lives. But right now in this moment, you know, it's like really ironic when you have a giant tech company that's willing to spend$72 billion a year on AI infrastructure and then, you know, cut a bunch of human roles, human jobs for efficiency reasons.