Olivia Moore, a partner at venture capital firm a16z, believes consumer AI has untapped potential beyond subscriptions. Her report highlights the surprising absence of AI in key consumer sectors and suggests a shift towards advertising and open-source solutions could boost the market.

‘ChatGPT is the giant, but smaller players are proving their staying power,’ Moore observes, adding that the industry can tap into new revenue streams to overcome the current subscription-centric model.

‘I don’t want more people paying for AI,’ Moore asserts, proposing a model where consumers get free access with ads, and only pay if they choose to remove them. This could democratise access while generating revenue.

The marginal cost of AI services remains high, but Moore sees improvements in cheaper models and open-source building. As more consumer companies adopt these practices, the market could thrive.

‘We’re seeing a shift from consumer-first to a blend of consumer and enterprise,’ Moore concludes, suggesting that true consumer AI is yet to emerge fully. The market is still in its early days.