The AI pricing lie: why free is a trap and $20/month isn't enough
Let me be brutally honest
"Alla vill ha gratis. Och sedan blir de besvikna." (Everyone wants free. And then they get disappointed.)
I've lost count of how many organizations I've seen follow the same path:
- Try free ChatGPT
- Get excited about the demos
- Try to use it for real work
- Get frustrated with limitations
- Conclude "AI doesn't work"
The problem isn't AI. The problem is the pricing model is designed to get you hooked on something you can't actually use.
The free tier trap
What free actually gives you
- ~4,000 tokens of context (3 A4 pages)
- Older, weaker model versions
- Throttled during peak hours
- Rate limits that kick in fast
- Your data used for training
What free is designed to do
Make you think AI is magic so you upgrade.
The demos work because they're simple. Ask ChatGPT to write a poem? Magic. Ask it to summarize your 50-page report? "Sorry, I can't process files that large."
"Gratis ger gratis resultat." (Free gives free results.)
The $20/month illusion
"Just upgrade to Plus! Problem solved!"
No. Here's what $20/month (~220 SEK) actually gets you:
What you gain
- Access to newer models (GPT-4, etc.)
- Larger context window (~32k tokens)
- Priority access during busy times
- Some advanced features
What you still don't get
- Unlimited usage (fair use policy kicks in)
- Professional-grade context (still limited)
- API access for integration
- Data training opt-out by default
- Consistent performance for heavy use
The hidden ceiling
Most $20/month users hit the limit within their first serious project. Then they see: - "You've reached your usage limit. Please wait." - "Switching to a slower model due to high demand." - Context window still filling up after 20-30 exchanges
The $20/month tier exists to convert free users, not to support professional work.
The cost shock nobody warns you about
Here's what I see constantly in organizations:
The evaluation phase
"We tested ChatGPT and it works great! Let's roll it out to the team."
Cost during evaluation: 0-220 SEK/month per tester
The reality phase
"Wait, why can't it handle our documents? Why is it forgetting context? Why is the API bill so high?"
Actual cost for professional use:
| Use case | Free | $20/mo | What you actually need | Reality cost |
|---|---|---|---|---|
| Individual research | OK | Better | Sufficient for light use | 220 SEK/mo |
| Document analysis | Breaks | Struggles | $200/mo tier | 2,200 SEK/mo |
| Team deployment | Impossible | Limited | API access | 5,000-50,000+ SEK/mo |
| Production integration | Impossible | Impossible | API + infrastructure | 10,000-200,000+ SEK/mo |
The jump from "testing" to "production" is 10-100x in cost. Nobody tells you this upfront.
The enterprise pricing trap
"Just get enterprise! It solves everything!"
Let me explain enterprise AI pricing reality:
The base cost
- Platform fees: 5,000-50,000 SEK/month before usage
- Per-user licensing: 200-500 SEK/month per seat
- Setup and integration: 50,000-500,000 SEK one-time
- Support/SLA: 10-20% of total cost annually
The usage cost
- Per-token pricing that scales with actual use
- Context window costs that multiply with document size
- API calls that add up faster than you expect
What they don't tell you
Enterprise gives you the same models that are available on API. You're paying 50x for: - A nicer admin console - Contract terms instead of click-through - Support SLAs - Compliance checkboxes
Is that worth 50x the cost? For some organizations, yes. For most, API access with proper contracts would suffice at 10% of the cost.
The real pricing math
Let me show you what AI actually costs at different scales:
Individual professional (consultant, analyst)
Minimum viable: 220-440 SEK/month - Claude Pro or ChatGPT Plus - Works for 80% of individual tasks - Will hit limits on complex projects
Actually comfortable: 2,200+ SEK/month - Claude Pro + API credits for heavy work - Or ChatGPT Pro ($200/month tier) - Handles professional document work
Small team (5-10 people)
Budget version: 1,100-2,200 SEK/month total - Shared API access - Careful usage management - Will frustrate heavy users
Working version: 10,000-25,000 SEK/month - Individual accounts for heavy users - API pool for programmatic use - Buffer for usage spikes
Organization (50+ users)
Don't even try to do this on consumer subscriptions.
Realistic: 50,000-200,000+ SEK/month - Mix of user licenses and API access - Proper enterprise agreements - Integration infrastructure - Usage monitoring and optimization
What vendors hide in fine print
"Unlimited" isn't
Every "unlimited" AI plan has a fair use policy. Hit it and you get: - Slower models - Rate limiting - "Please try again later" messages - Silent quality degradation
Output limits exist regardless of input
You can pay for 1 million token context windows. Output is still capped at 4,000-30,000 tokens per response. Always.
Pricing changes without warning
API costs have changed multiple times. What cost X yesterday might cost 2X tomorrow. Budget accordingly.
"Free" has a cost
When the product is free, you are the product. Your data trains their models. Your usage patterns inform their pricing strategy.
How to actually budget for AI
Step 1: Define what you actually need
Don't budget for "AI." Budget for specific outcomes: - Document analysis: X documents per month - Writing assistance: X hours saved per week - Code generation: X features per sprint - Customer support: X queries per day
Step 2: Calculate realistic costs
| Task type | Per-task cost | Monthly volume | Monthly cost |
|---|---|---|---|
| Simple Q&A | ~0.01 SEK | 1,000 | 10 SEK |
| Document summary | ~0.50-2 SEK | 100 | 50-200 SEK |
| Long analysis | ~2-10 SEK | 50 | 100-500 SEK |
| Code generation | ~1-5 SEK | 200 | 200-1,000 SEK |
Add 50% buffer for iteration and errors.
Step 3: Plan for the real tier
| Your need | Budget minimum | What to buy |
|---|---|---|
| Exploration | 0 | Free tiers (accept limits) |
| Individual professional | 220 SEK/mo | Claude Pro or similar |
| Heavy individual use | 2,200 SEK/mo | Pro tiers + API credits |
| Team use | 10,000+ SEK/mo | API access + management |
| Enterprise | 50,000+ SEK/mo | Proper enterprise agreement |
The subscription vs API decision
Subscriptions ($20-200/month per user)
Good for: Individual exploration, light professional use Bad for: Heavy use, integration, team scaling
API access (pay per token)
Good for: Production use, integration, predictable scaling Bad for: Unpredictable usage, individual casual use
The hybrid approach (what actually works)
- Subscriptions for exploration and light users
- API access for power users and production
- Enterprise agreement for compliance requirements (if needed)
Don't let vendors push you to enterprise when API + proper contracts would suffice.
Your responsibility
"Det kostar detta mycket. Acceptera det eller gör något annat." (It costs this much. Accept it or do something else.)
AI isn't free. Professional results require professional investment. The vendors aren't lying - they're just not volunteering the full picture.
What you must accept: - Free is for testing, not evaluation - $20/month is entry-level, not professional - Production use costs 10-100x what testing costs - Enterprise pricing is often 50x API pricing
What you must do: - Budget based on outcomes, not marketing - Plan for the tier you'll actually need - Build in buffer for usage growth - Negotiate contracts, don't just click through
AI is a tool. Tools cost money. Verktyg, inte magi.
The bottom line
Next time a vendor shows you a demo on their free tier, ask:
- What tier do I need for this to work with my actual documents?
- What's the monthly cost at 10x this usage?
- What happens when I hit fair use limits?
- What's in your Terms of Service about data usage?
If they can't answer clearly, walk away and find a vendor who will.
See also: Context Window Economics for understanding the technical constraints behind these pricing tiers.
Based on 30 years of production development and watching organizations get burned by AI pricing surprises Published: December 2025