Andreessen Horowitz sees consumer AI monetization expanding beyond subscriptions

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AI monetization beyond subscriptions

Highlights

Andreessen Horowitz's Connie Chan Moore sees consumer AI monetization expanding beyond subscriptions to include ad-supported and freemium models, addressing weak direct payment uptake.
Costs are improving for consumer AI due to cheaper subscription plans, smaller models, and startups embracing open-source systems, potentially reducing the marginal cost burden for scaling.
Moore notes most current consumer AI revenue stems from prosumer use cases, with major sectors like social, finance, and health remaining largely untapped and likely to see growth focus over the next six months.

Revenue model shifts shape consumer AI outlook

As reported by TechCrunch, Moore this week discussed her new ranking of the top 100 consumer AI apps and argued that the sector still has significant room to grow despite concerns over weak consumer monetization. She says OpenAI's stronger push into enterprise does not necessarily signal a retreat from consumer products, but instead reflects where AI revenue is currently most concentrated, particularly in subscriptions and token-based usage.

Moore says she is less focused on raising the share of households that pay directly for AI services and more interested in business models that monetize users without requiring monthly fees. In her view, many consumers may prefer free access supported by advertising, with paid subscriptions reserved for users who want to remove ads or unlock added features.

She also points to signs that costs are starting to improve. Cheaper plans, smaller models and a growing willingness among startups to build on open-source systems could reduce the marginal cost burden that has made consumer AI harder to scale than classic internet services such as search or social media.

Whitespace remains across major consumer sectors

Moore says much of today's so-called consumer AI revenue actually comes from prosumer use cases rather than broad mainstream adoption. She highlights product-building tools, AI marketing applications and work management services as the main categories where users are already spending meaningfully, citing companies such as Lovable, Replit, Fal, Higgsfield, HeyGen, Manus, Fireflies AI and Granola.

That trend is also blurring the line between consumer and enterprise software. Moore says newer AI companies can begin with individual users and become majority-enterprise businesses within 18 months, a much faster shift than earlier consumer-first software companies typically achieved.

At the same time, she says several large consumer categories remain largely untouched in the current top 100 rankings, including social networking, dating, marketplaces, retail, travel, finance and health. In her assessment, the next six months are likely to show whether AI developers can move beyond prosumer demand and establish stronger positions in those broader consumer markets.

In our earlier article on Malaysia’s Budget 2027 AI initiatives, we covered the government’s expansion of the AI Untuk Rakyat Programme with an additional 100,000 free AI subscriptions for youth, alongside broader funding for AI skills and digital learning. The report also highlighted allocations aimed at accelerating innovation R&D, supporting safe AI adoption, and helping SMEs automate—showing how subsidized access and public investment are being used to widen AI usage and capability building.

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