We scan new podcasts and send you the top 5 insights daily.
Rillit CEO Nicholas Kopp notes that while outcome-based pricing is the goal for many AI companies, it's hard to implement. The challenge lies in defining and quantifying an "outcome" like "closing the books." As a result, companies are using consumption metrics like tokens and workflow runs as imperfect but measurable proxies.
As AI moves from being a simple tool to an autonomous agent, pricing models are evolving. Companies like Sierra, chaired by OpenAI's Brett Taylor, advocate for outcome-based pricing, which charges for delivered results (e.g., a completed report) rather than the underlying token consumption.
Budgeting for AI is difficult because the utility-based, per-token pricing model is not viable or scalable for business departments like marketing and sales. This system is a temporary phase; expect AI providers to shift toward more predictable, outcome-based pricing models as the technology matures.
AI enables a fundamental shift in business models away from selling access (per seat) or usage (per token) towards selling results. For example, customer support AI will be priced per resolved ticket. This outcome-based model will become the standard as AI's capabilities for completing specific, measurable tasks improve.
The biggest challenge in charging for AI based on results (e.g., increased sales) is negotiating who gets credit. Companies struggle to prove their software, and not the customer's own business strategy, was responsible for the gains, which requires complex contract negotiations.
AI is splitting software into two categories: "access products" and "work products." While access tools can stick with seat-based pricing, work products (e.g., AI that processes legal contracts) must adopt outcome-based pricing, as value is tied to output, not the number of users.
While foundational models are metered by tokens, vertical AI solutions in specific domains like healthcare or finance will increasingly compete by charging for measurable business outcomes. Customers will hold these apps accountable for delivering tangible ROI, making outcome-based pricing a key differentiator.
OpenAI Chair Bret Taylor argues that the biggest hurdle for established software companies isn't adopting AI technology, but disrupting their own business models. Moving from per-seat licenses to the outcome-based pricing that agents enable is a more profound and difficult challenge.
The B2B software business model is evolving from licenses and subscriptions toward outcome-based pricing, where customers pay for successful task completion. While currently limited to measurable areas like customer support, this model represents the next major disruptive wave as AI makes more outcomes quantifiable.
OpenAI is reportedly exploring outcome-based pricing, where customers are charged only if an AI successfully completes a task. This model shifts from a commodity-like 'cost per 1000 tokens' (CPM) to a value-aligned 'cost per successful action' (CPA), better aligning incentives.
In the age of AI, software is shifting from a tool that assists humans to an agent that completes tasks. The pricing model should reflect this. Instead of a subscription for access (a license), charge for the value created when the AI successfully achieves a business outcome.