Ed Zitron says LLM pricing breaks the software business model and costs are already rising
TobyWalsh · x · 2026-07-28
Ed Zitron argues that the economics of LLMs are structurally broken for consumer software: models incur usage-based token costs even when they fail, while most companies sell them as flat monthly subscriptions with vague limits. The article says costs are already showing up in the broader market, citing doubled memory prices and higher Macs/iPads, with iPhone prices expected to follow.
Zitron’s core point is that AI vendors can hide true compute costs only temporarily. SemiAnalysis is cited as finding that heavy users can burn hundreds of dollars on a $20 plan and thousands on a $200 plan, which makes the current pricing model hard to sustain long term.
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