>Without knowing the numbers it's hard to tell if the business model for these AI providers actually works

It'll be interesting to see what OpenAI and Anthropic will tell us about this when they go public (seems likely late this year--along with SpaceX, possibly)

Don't forget gyms and other physical-space subscriptions. It's right up there with razor-and-blades for bog standard business models. Imagine if you got a gym membership and then were surprised when they cancelled your account for reselling gym access to your friends.

If they rely on this to be competitive, I have serious doubts they will survive much longer.

There are already many serious concerns about sharing code and information with 3rd parties, and those Chinese open models are dangerously close to destroying their entire value proposition.

> selling an oversubscribed product with baked in usage assumptions is a functional business model in a lot of spaces

Being a common business model and it being functional are two different things. I agree they are prevalent, but they are actively user hostile in nature. You are essentially saying that if people use your product at the advertised limit, then you will punish them. I get why the business does it, but it is an adversarial business model.

The Business model is Uber. It doesn't work unless you corner the market and provide a distinct value replacement.

The problem is, there's not a clear every-man value like Uber has. The stories I see of people finding value are sparse and seem from the POV of either technosexuals or already strong developer whales leveraging the bootstrapy power .

If AI was seriously providing value, orgs like Microsoft wouldn't be pushing out versions of windows that can't restart.

It clearly is a niche product unlike Uber, but it's definitely being invested in like it is universal product.