What is Artificial Intelligence (AI)?
Artificial intelligence is the simulation of human intelligence by computer systems. AI encompasses machine learning, natural language processing, computer vision, robotics, and expert systems. In 2026, AI has moved from experimental to operational, with enterprise AI adoption exceeding 70% globally.
AI in business falls into three categories: predictive AI (forecasting outcomes from data), generative AI (creating new content like text, images, and code), and agentic AI (autonomous systems that take actions on behalf of users). Each category has different cost structures, risk profiles, and ROI timelines.
For product leaders and executives, the critical question is not 'should we use AI?' but 'what are the unit economics of our AI features?' Richard Ewing's AI Unit Economics Benchmark (AUEB) tool helps answer this question by calculating the true cost per useful AI output.
Why It Matters
AI is transforming every industry, but most AI initiatives fail due to poor unit economics rather than technical limitations. Understanding AI costs, risks, and governance is essential for any technology leader in 2026.
Frequently Asked Questions
What is AI in simple terms?
AI is software that can learn from data and make decisions or predictions. It ranges from simple recommendation engines to complex autonomous agents.
How much does AI cost for businesses?
AI costs vary enormously. API-based AI (GPT-4, Claude) costs $0.01-0.10 per query. Custom models can cost $100K-$10M to train. Use the AUEB calculator at richardewing.io/tools/aueb to estimate your specific costs.
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Richard Ewing is a Product Economist and AI Capital Auditor. He helps companies translate technical complexity into financial clarity.
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