Opening Thought
AI was supposed to democratize software — not make it more expensive.
Yet here we are: costs falling, prices rising, and efficiency becoming the new excuse.
AI cut the code, but not the cost.
While 2025 brought massive efficiency gains across the tech sector, it also brought over 159,000 layoffs — with companies citing “AI automation” as justification.
Ironically, enterprise software prices climbed right alongside.
Two stories, one system:
Efficiency soaring. Affordability sinking.
The Efficiency Paradox
Across the industry, AI has slashed the time and cost needed to build, test, and support software.
Automated development, predictive maintenance, and generative coding tools now handle tasks that once required entire teams.
So logically, if the cost to build software is shrinking, shouldn’t that make it cheaper to buy?
Not quite.
Here’s what changed in 2025:
- 🤖 AI’s invisible margin: Development and support costs dropped 40–60%, but subscription rates still rose 10–20%.
- 💼 Layoff logic: 575 tech firms, 159,844 jobs gone — including Microsoft (15K), Salesforce (4K+), Meta (4.2K), Intel (-15%).
- 📉 Cost–price disconnect: Companies saved billions through automation but passed almost none of it to customers.
- 🏦 SaaS consolidation: Platforms used “value” as the new pricing defense — selling integrations, trust, and ecosystem lock-in.
- 🍏 Brand psychology: Just like Apple vs Samsung — same core product, different emotional pull. Software pricing is now shaped more by perception than production.
Value Shift: From Cost to Perception
This paradox reveals a quiet transformation in how software is priced.
It’s no longer about how much it costs to build — it’s about how much users are willing to pay for convenience, reliability, and ecosystem comfort.
AI has made it cheaper to develop software — but also easier to justify higher perceived value.
You’re not paying for lines of code anymore.
You’re paying for the illusion of seamlessness.
As I explored in my blog from October 2022, Our Brains Are Branded, perception often beats performance.
Apple and Samsung use similar hardware — yet Apple commands loyalty through emotion, not engineering.
The SaaS market is following the same playbook.
What I’m Watching
👉 AI ROI: Will efficiency gains ever reach customers — or remain locked in corporate margins?
👉 Enterprise pricing: Who moves first — the platform that cuts prices, or the market that demands transparency?
👉 Brand influence: Emotion is still the most powerful pricing lever. The stronger the brand story, the easier it is to sustain premiums.
👉 Ecosystem control: The more “connected” you are, the harder it is to leave — and the easier it is to pay more.
Beyond Growth Takeaway
AI promised democratization — but delivered consolidation.
Efficiency should have lowered costs; instead, it inflated margins.
The real product isn’t software anymore.
It’s perception — packaged, priced, and personalized through AI.
So the next time your SaaS renewal email arrives, ask yourself:
Are you paying for innovation — or inertia?
💬 What do you think?
Is it right for SaaS companies to keep increasing prices even as AI makes it cheaper to build and maintain?
🤝 Let’s Collaborate
I’m a Canada-based entrepreneur and business growth consultant working where CPG, media, and technology intersect.
Whether it’s a product on a shelf or a brand in a feed, my focus is helping companies move beyond transactions to build stories, systems, and scale.
What I help with:
🌍 Trade & Diversification — finding new buyers, smarter routes, and resilience beyond one market
🛒 CPG Strategy & Insights — aligning product, pricing, and positioning with real consumer behavior
📺 Media & Digital Platforms — FAST channels, partnerships, and workflows that turn audiences into assets
In every category—from wellness to tech—the winners aren’t just making things; they’re shaping perception. They combine value + technology + trust to build growth that lasts.
🔔 Stay Connected
If this paradox of falling costs and rising prices resonates with you, let’s keep the conversation going.
👉 Subscribe to my newsletter on entrepreneurship, media, AI, and creative growth: iamgrt.kit.com
