In 2007, Luke Arrigoni, an AI entrepreneur, earned $63,000 at his first job as a junior software developer. Today, he says AI tools that write better code than he did back then cost just $120 annually.
The numbers don’t sit right with him. Arrigoni, who runs Loti AI, a company that helps Hollywood stars find unauthorized deepfakes, worries that underpriced AI tools encourage companies to eliminate entry-level roles. He wants to flip the incentive structure so people’s careers don’t end before they begin. “If you make the AI systems more expensive, then you have an economic incentive to hire someone that is starting out,” he says.
AI transforming—or altogether eliminating—jobs has become a perennial anxiety. But the concern is gaining new urgency as demand for AI agents grows. Those AI systems can now make sales calls and write software code, work that was once reserved for humans.
So far, the situation isn’t dire. Hiring platform ZipRecruiter estimates that this year, summer internships in the US rebounded to roughly the same level as they were before the pandemic.
But that might change in the near future. At the Snowflake Summit in San Francisco last week, OpenAI CEO Sam Altman compared current AI tools to interns. The next-generation technology would be like a more “experienced” worker, he said. In some companies, managers have already started overseeing “a bunch of agents” the way they traditionally have “relatively junior employees,” Altman claimed.
OpenAI has talked about mitigation efforts like reskilling programs to stave off a potential jobs crisis—but it hasn’t mentioned charging higher prices for its services to slow the transition to AI work.
That’s what has Arrigoni on edge. Even after accounting for the priciest add-on features, AI coding agents cost a fraction of a junior engineer. If inexperienced workers can’t get a gig, Arrigoni believes, they might not gain the expertise needed to lead future teams—whether human or machine.
OpenAI did not respond to a request for comment.
“Less Than Human”
AI pricing has fluctuated since ChatGPT launched as a free chatbot in 2022 and triggered an AI boom. Generally, many AI companies still offer free tiers for limited use, and prices for basic tiers have declined. Top-tier plans for the newest features have grown pricier, though not to the point of generating profits for the companies offering them—or deterring adoption.
Startup executives and pricing consultants attribute low prices to intense competition among AI purveyors. “Their only way to win is mass adoption,” says Ajit Ghuman, CEO of pricing strategy company Monetizely. That means AI companies need to charge the same affordable prices as their rivals. Unless electricity or GPU shortages become major problems, or one company corners the AI market, it’s difficult to see prices rising significantly, Ghuman says.
Decagon, a San Francisco startup that sells a customer service chatbot used by retailers and tech companies, charges $1 or less per conversation—roughly half the cost of human support. In some cases, the chatbot may be more effective than a person, but Decagon believes its clients would never pay more for it. “The reason to invest in AI is efficiency,” CEO Jesse Zhang says. “You're going to be less than human labor. That's kind of like the point of technology.”