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App Economics

Your Free AI Is Running Out

Free AI plans keep shrinking.

Smaller allowances, shorter trials, pricier upgrades.

Every message you send costs the company to answer, and almost nobody pays it back.

A study of more than 115,000 subscription apps put a number on it.

Free-to-start apps turn a median 2.1% of downloads into paying users within 35 days.

For years, one more user would cost an app next to nothing. The study’s contributors say AI ended that.

The ones who do pay don’t stay. AI app subscribers cancel 30% faster than subscribers to other apps.

Charge everyone upfront, then?

Paywalls convert 5x better. But the study’s authors say free still wins when free users bring in the next ones.

More users will cover the bill, right?

The opposite. Every new user adds to it, and the ones who use the app most cost it the most.

The message limit you hit. The trial that ended early. The upgrade button that keeps popping up.

Each one is an app trying to cover the bill.

If you run an AI app, you’re stuck between a bigger bill and fewer users.

Our take: The limit screen is the bill showing up. As long as almost nobody pays, expect free AI to keep getting smaller.

Together with Imprezia

Keep Your Free Tier Running

Your free users chat all day, and every one of those chats runs at a loss.

Imprezia turns those chats into income with one ad, shown only when a user’s question matches an offer.

It works with the AI app you already run, on any model, about five minutes from API key to first paid impression.

A user asks your travel bot about a weekend away, and a matching hotel shows up as a sponsored recommendation.

On TravelDealz, a free AI travel chat, the first ad in a session drew an 11.01% click-through rate.

Stack three or more, and clicks fall to about 2.5%. One well-timed ad does the work.

You decide what data gets passed along.

Keep your free tier. Let the chats pay for it.

DevDay

OpenAI Launches dots

A chatbot only works when you ask it something.

Stop, and it waits. The research, the follow-up, the weekly report, all of it sits there until you come back.

OpenAI wants to change it.

At its DevDay event, it launched dots, agents built to keep working after you log off.

Each one gets its own cloud computer and browser, and reaches more than 4,000 apps through ChatGPT’s plugins.

Message it in ChatGPT, Slack, or Teams. Texting is on the way.

Always on means it acts without asking?

Not by default. Dots start with built-in rules for when to act alone and when to check with you first. OpenAI still says they make mistakes and recommends reviewing anything important.

Pro and Business Premium subscribers in eligible markets get their first one included.

Sol, OpenAI’s everyday model, got an upgrade as well. The company says it’s better at coding, computer use, and office work, and it’s available in Codex, ChatGPT Work, and the API.

Our take: A chatbot answers. An agent keeps a job. Give yours one small, recurring task first, and read what it did before you hand it anything bigger.

Chips

AMD Buys Fei-Fei Li’s World Labs

Chatbots have read about the world. They’ve never had to move through it.

Fei-Fei Li started World Labs in 2024 to fix it.

It builds world models, AI that creates and reasons about 3D spaces instead of text.

Its app, Marble, turns a photo or a line of text into a world you can walk through.

AMD has agreed to buy it. It’s the second-biggest acquisition in the chipmaker’s history.

Li joins AMD as executive vice president and chief scientist once the deal closes, reporting straight to CEO Lisa Su.

Why would a chipmaker want a research lab? To see what’s coming.

Su says building chips for the next generation of AI takes a deep understanding of how models are changing.

World models are one of the leading bets for teaching robots to handle the physical world.

Is Marble going away?

No sign of it. AMD says the team keeps its focus on model research, and Li says the work stays open to the wider community.

Our take: The chip race used to be about speed. Now it’s about knowing what the next models need before anyone else does. AMD bought the people who’ll tell it first.

Attio In Focus

Your Agent Changed What?

An agent ran on your pipeline all night.

By morning, a deal had jumped a stage and a handful of contacts looked different.

Which changes were right? Nobody’s sure.

So someone checks every record by hand, and the time the agent saved is gone.

Attio shows its work.

Open any run and see what each agent read, decided, and did.

Each one runs as someone you name, with exactly their permissions. Pause, replay, or cancel any run.

The agent keeps working. You keep the receipts.

Coming in Hot

AI Tools of the Day

Government

The Government Gets a Chatbot

Passport renewals, Medicare plans, veterans’ benefits.

The White House wants all of it answered by one chatbot.

America.gov is the White House’s new conversational front door to federal services.

Launch reporting says Gemini and Grok power it.

An executive order signed at the launch tells every agency to connect its public-facing services as soon as possible.

Ready to use now?

Partly. The first version searches information across federal websites, from job postings to released UFO files. Passports, name changes, campsite bookings, and Medicare choices are on the list for later.

What happens to what you type?

The site’s privacy page says it doesn’t track you across the web, save your conversations, or use your specific location.

Two civic technologists told reporters it hasn’t proven itself yet.

The next time a deadline or a benefit is on the line, the first answer might come from a chat box.

Our take: Use it to find the right page, not as the final word. For anything with a deadline or money attached, click through to the agency itself before you act.

Notable AIs

Notable AI Tools

📞 Pine AI calls companies for you, works the phone menus, and pushes for lower bills, insurance rates, and refunds.

🛒 AlphaWeb swaps your pile of ecommerce plugins for one AI that builds your store, funnels, and A/B tests.

Interesting AI

Long drives get quiet. The podcast ends, the playlist loops, and the passenger seat stays empty.

Timo is a small AI robot that rides on your dashboard and talks back.

Say “Hi Timo,” and it answers with a voice, a face on its little screen, a flash of light, and a turn of its head.

It remembers what matters to you.

And it keeps secrets. Leave it a voice note, a joke, or a little confession, and it stays hidden until someone else discovers it later.

Permissions are your call.

Finally, a passenger who’s always up for a chat.

Agents

Agents Haggled Well, Then Guessed Wrong

Sending an agent to shop for you sounds easy.

The hard part turns out to be telling it what you want.

Anthropic ran a book swap for 201 of its employees. Each person spent about five minutes telling Claude what they like to read, then sent an agent onto a trading floor to haggle with everyone else’s.

From that short chat, Claude matched people’s own taste on 61% of book pairs. A coin flip gets 50%.

The bargaining went fine.

85% of the shortfall came from agents working off a fuzzy picture of their person.

A smarter model fixes it?

Barely. Stronger models negotiated better, but judged by what people actually wanted, the gain nearly vanished.

People who typed more into that first chat got represented better.

One agent spent its final hour pleading with the whole floor to take its person’s book, which every other agent had ranked dead last.

Still, participants would hand an agent about 30% of a year’s book budget. A well-read friend got 40%.

Our take: The best upgrade for any agent is more of you. Give it two extra minutes on what you love and what you’d never touch, then read its summary of you before it starts.

Prompt of the Day

Make Me Known

Important Note: You’ll need to click the button to get the complete prompt.

That’s all for Tuesday!

Thanks for reading,

— There’s An AI For That