The Uncomfortable Truth
73% of AI features are margin-negative at the unit level. Every AI interaction has a marginal cost that scales linearly with usage.
The AI Unit Economics Equation
AI Feature Margin = Revenue per Interaction - Cost per Interaction
Cost = Input Tokens × Price + Output Tokens × Price + Embedding + Vector Storage + Orchestration
Step-by-Step (30 min)
Step 1 (10 min): Pull API logs. Average input: 2,000 tokens × $2.50/1M = $0.005. Average output: 800 tokens × $10/1M = $0.008. Total: ~$0.013 per interaction.
Step 2 (10 min): Calculate revenue per interaction. $50/month ÷ 200 requests = $0.25.
Step 3 (5 min): Margin = $0.25 - $0.013 = $0.237 (94.7%). But add fully-loaded costs (salary, fine-tuning, safety) and margin drops to 40-60%.
Model Routing: The Biggest Lever
Most organizations use one model for everything. Implementing model routing reduces costs 60-75%. Send simple Q&A to GPT-4o-mini (90% cheaper), reserve Opus for complex reasoning.