AI chatbots are expensive to operate but most don’t want to subscribe to them
Billions use AI tools every day, but for founders, the trouble is not even on the horizon – it’s here. That’s because new research shows most people don’t want to pay for their chatbot subscriptions, even though they’re incredibly expensive to operate.
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Billions use AI tools every day, but for founders, the trouble is not even on the horizon – it’s here. That’s because new research shows most people don’t want to pay for their chatbot subscriptions, even though they’re incredibly expensive to operate.
- New research shows most users don’t want to pay for their AI chatbot subscriptions.
- 1.8 billion users at an average monthly subscription cost of $20 per month equals $432 billion a year. But today, the market is only worth $12 billion, indicating that only about 3% pay for premium services.
- 39% of Americans want nothing to do with AI, and one barrier stands out above the rest: human connection.
To be fair, the trend is clear. People are adopting AI at an unprecedented scale, and there are now almost two billion users worldwide, according to an estimate by the US venture capital firm Menlo Ventures.
It’s unsurprising, really. AI is everywhere: it’s on Google, it’s integrated within Microsoft Office, it’s pushed to billions of Meta app users.
“Strikingly low conversion rate”
Let’s not forget OpenAI’s ChatGPT. According to Similarweb, the ChatGPT app for iOS was downloaded nearly 30 million times in June. Over the same period, App Store downloads of TikTok, Instagram, Facebook, and X reached just a bit more, around 33 million.
Worldwide iPhone App Store downloads over the last 28 days:
undefined Similarweb (@Similarweb) June 24, 2025
ChatGPT: 29,551,174
TikTok + Facebook + Instagram + X: 32,859,208 pic.twitter.com/v4tIaC65ou
Is this a tipping point? In its research paper titled “2025: The State of Consumer AI,” Menlo Ventures is clear: “This is no longer experimentation. It’s habit formation at an unprecedented scale.”
However, the study immediately warns that “beneath the hype, real usage patterns are more nuanced than expected.” Namely, the value of all these chatbots is leaking because almost no one actually subscribes to them for money.
Menlo Ventures did the math. 1.8 billion users at an average monthly subscription cost of $20 per month equals $432 billion a year. But today, the market is only worth $12 billion, indicating that only about 3% pay for premium services.
That’s a “strikingly low conversion rate and one of the largest and fastest-emerging monetization gaps in recent consumer tech history,” says the study.
Even ChatGPT, with its first-mover advantage, only converts about 5% of its weekly active users into paying subscribers.
Indeed, a new report from Pew Research Center found that the number of US adults who have used ChatGPT at least once has doubled to 34% since 2023, but the majority (66%) have never used the chatbot, and twenty percent haven’t even heard of it.
A space for specialized tools
That disparity between usage and paying for things means that there is a large “white space,” an opportunity to build things that people will gravitate toward, and for which they might even pay.
“Our survey shows a striking gap between how often people tackle personal, essential tasks and how rarely they use AI for help. These aren’t dead zones; they are high-frequency, high-friction, high-trust needs where context, continuity, and accuracy matter most,” said Menlo Ventures.
“That’s exactly where general AI assistants fall short today, creating an opening for specialized tools to win.”
For instance, 71% of people research health questions, but only 20% use AI to do it (of course, doubting AI’s health advice could be smart). Eighty-two percent of people pay bills, but only 16% use AI to help.
“Founders can create real value by tackling personal, high-trust tasks where generic tools fall short – and where people will pay for solutions that truly work,” says the study.
Why people resist even flirting with AI
The report’s tone is optimistic overall, but its authors do a good job of talking to AI resistors and rejectors. Indeed, 39% of Americans want nothing to do with AI, and one barrier stands out above the rest: human connection.
A striking 80% say they prefer interacting with people over machines, “a belief that goes beyond convenience and speaks to how they think important tasks should be done,” explains Menlo Ventures.
Related to this, 53% say they need to feel accountable to another human. They want oversight, responsibility, and real connection in how decisions get made.
Seventy-one percent of consumers who don’t use AI say they’re worried about data privacy, 58% don’t trust AI information, and 40% believe AI is biased.
“Replacing human interaction, creativity, thinking, and problem-solving skills sets a dangerous precedent for how we use our brains – which will wither without practice,” one 27-year-old self-employed man in the media industry told the survey authors.