Elizabeth Yin Claims AI Tools Entering Food Delivery Style Free Era
Elizabeth Yin pointed out that a large number of users have built their own AI tools, highlighting the issue of who pays for other AI tools.
She believes we are currently in an era similar to food delivery: users can obtain services almost for free, with others (advertisers, investors, or subsidizers) footing the bill.
Market Mechanism: AI companies provide low-cost or free tools to developers and end-users, facing challenges in monetizing after the widespread adoption of self-built tools, with funding flowing into venture capital and large model infrastructure subsidies; AI platforms and early users benefit, while pure pay-for tools providers face pressure.
Source: Public Information
ABAB AI Insight
Elizabeth Yin, as a managing partner at Hustle Fund, has previously invested in early-stage consumer AI and SaaS projects, and has analyzed the path from free growth to monetization of AI tools multiple times between 2023-2025, witnessing several AI startups facing declining retention due to "user-built alternatives."
In terms of capital pathways, venture capital and large companies subsidize reasoning costs and open-source models, directing resources towards user acquisition rather than immediate monetization, motivated by the desire to quickly capture workflow entry points and accumulate proprietary usage data, similar to Uber's early cash-burning strategy for scale, with hopes of achieving high-margin exits through enterprise versions, advertising, or data monetization in the future.
Similar cases include food delivery platforms (DoorDash, Uber Eats) from 2015-2018 relying on venture capital subsidies to cultivate user habits, as well as early free strategies from Notion and Figma; the current AI tools sector is in the early stage of transitioning from explosive self-built growth to subsidy-driven scale competition.
Structural Judgment: This essentially represents a reconstruction of the industrial chain driven by technological substitution. Low-cost large models and self-built tools lower the entry barrier, shifting pricing power from traditional paid software to a "free + subsidy + backend monetization" model, where attention and data become the new scarce resources, allowing AI services to first acquire user scale through investor funding, and then build long-term barriers through network effects and data flywheels.
ABAB News · Cognitive Law
The more free the service, the more valuable the user.
The more people build their own tools, the busier the subsidizers become.
When the free era ends, the data wall will have been built.