Andrew Chen revisits ARPU vs inference cost: consumer AI still >10x off
andrewchen · x · 2026-09-20
Andrew Chen revisits his earlier thesis that AI-native consumer apps need ARPU > average inference cost per user, saying models like Jev may bring the crossover sooner than expected.
In the quoted thread he estimated we're >10x off: monthly ARPU is around $2-5 while token costs for an AI-heavy app could be $20-50; global audiences can't pay US/EU rates; and every capability jump raises consumer expectations, keeping the cost bar moving.
Related event: Andrew Chen: Ultra-Cheap Models Could Unlock Ad-Supported Free AI Apps(2 posts)→
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