Cheap AI is a temporary illusion paid for by investors, and prices are set to jump sharply — bad news for anyone who built their work around $20 AI tools.

• A heavy Claude Code user costs $15,000 a year to run but pays only around $1,200, because investors cover the rest to get people hooked.
• It's the Uber playbook: set prices below cost, kill rivals, build a habit, then raise prices — and AI subscriptions are expected to roughly double within two years.
• AI keeps getting more expensive per task, not cheaper, because new agentic tools burn 5 to 30 times more tokens fixing one bug than old chatbots did.
• Big tech is spending hundreds of billions on data centers and chips while only $12 billion comes in from users, filling the gap with debt and shaky "round-trip" deals where the same money loops between Microsoft, Nvidia, and OpenAI.
• The squeeze is already here: services are quietly getting worse, 40% of 2024 AI startups are dead, and cheap plans may soon cost 10 times more or vanish.

Outlook: As investor money dries up, expect steep price hikes and shutdowns, turning AI into a luxury most freelancers and small businesses get priced out of.