The $20 AI Subscription Trap: Why Everyone Copied a Price Nobody Asked For Walk into any AI tool today—ChatGPT Pro, Claude+, Copilot Premium—and you'll see the same number staring back at you: $20/month. It's become the default, the assumed price point for "serious" AI access. But here's what nobody talks about: that price was never a natural market discovery. It was a guess that stuck. ## How We Got Here OpenAI picked $20 for ChatGPT Plus back in 2023, and the industry followed like a school of fish. It made sense for them—it covered infrastructure costs while being "premium" enough to feel exclusive. Within months, every competitor matched it almost exactly. Anthropic? $20 for Claude Pro. Microsoft? $20 for Copilot Pro. But let's be honest: OpenAI was pricing for the San Francisco developer who spends $200/month on coffee without thinking twice. They weren't pricing for the freelancer in Mexico City, the startup founder in Lagos, or the engineer in Bangalore juggling multiple AI subscriptions. ## The Math That Doesn't Work for Most People Let's do some quick math. $20/month = $240/year. In the United States, that's roughly 5 hours of minimum wage work. In Nigeria, that's closer to 40 hours. In the Philippines, you're looking at nearly 60 hours of work just to afford one year of AI access. Now multiply that. A developer might want: - An AI coding assistant - An AI writing tool - An AI image generator - An AI research tool That's $80/month. $960/year. Suddenly you're looking at the cost of a used laptop in some parts of the world. The cruel part? These aren't luxury tools anymore. They're becoming essential infrastructure for staying competitive. It's like asking developers to pay premium rates for electricity. ## The Uncomfortable Truth About User Behavior Here's what the pricing data doesn't show: how many people *don't* sign up. I'd bet it's substantial. Most free tier users never convert because $20 isn't "too expensive"—it's "not worth the risk" when you're not sure about the ROI. A freelancer who could use AI to double their output might skip it because they're uncertain. A student who could use it to learn faster might not have a credit card, or their family doesn't think it's worth it. A startup in Southeast Asia might use it once, decide they can't justify the monthly burn, and go back to struggling without it. That's not a product problem. That's a pricing problem. ## Why the $20 Price Persists (Spoiler: It's Not About You) These companies have investors. Investors want consistent monthly revenue and clear monetization metrics. A $2 tier serving 100,000 users looks messy compared to a $20 tier serving 10,000 users, even though the revenue is the same. The latter looks "cleaner." Plus, there's anchoring. If you charge $20, customers perceive your AI as more powerful. Drop to $5 and suddenly you're the "budget option"—even if the AI is identical. ## The Case for Cheaper, Actually Here's the thing: if AI is going to be truly useful infrastructure, it can't remain a luxury item. It just can't. A $2-5/month tier wouldn't cannibalize paying customers—it would *create* them. A student using free AI today becomes a professional using paid AI tomorrow. A developer in India trying a cheap tier might become a team of developers. An entrepreneur testing the waters might become a power user. The companies that figure this out first—that you can make money at lower price points with higher volume—will own the next wave. They'll have users everywhere, not just in wealthy countries. ## What Actually Makes Sense The honest answer? It depends on your use case. If you're a professional making money with AI, $20 is trivial. If you're learning, experimenting, or in a price-sensitive market, it's not. The market could support both. But someone has to be brave enough to prove it. --- I'm building an affordable AI assistant ($2/month) with 50% of revenue going to animal rescue. [simplylouie.com](https://simplylouie.com)