AI Gross Margin
What is left of an AI product's revenue after the direct cost of producing it (inference, hosting, human review where needed). The difference from classic software is that cost grows with usage.
AI and GrowthTerm 78 / 81
Formula
AI gross margin = (Revenue − Inference and other direct costs) ÷ Revenue × 100
In practice
Bessemer's 2025 report says the fastest-growing AI startups ("Supernovas") run low margins and are often trading distribution for profit in the short term; the same report adds that this fast adoption may reflect low switching costs or a novelty that may not align with long-term value. A fast-growing product with thin margins may be buying its growth with its margin (our reading). Track margin by cohort and usage band, not by the average customer; the heavy user can be margin-negative (our reading). The question to ask: is your growth rate buying your gross margin?