AI can be a game changer for businesses, but it can also be an expensive drag on the balance sheet. A new report from billing software provider Chargebee found that companies that grew most in the last year were the ones that changed their pricing strategies to account for AI. The ones that were most successful combined a variety of pricing models: recurring subscriptions, usage-based models, outcome-based models and flat fees.

Four in five of the companies surveyed that added AI said they are also changing their pricing. But how to adjust prices, especially in a time of economic uncertainty, is a challenge. Just over half said customer retention is their top concern, but 40% of businesses that adjusted prices last year reported a disconnect between increases and customer value. Nearly a quarter of companies struggled with explaining the benefits of adding AI functions to their services, while technical issues also caused struggles. Most SaaS providers have traditionally charged enterprises based on individual licenses, which is far different from a usage fee.

Many companies, the study found, are testing out a variety of pricing structures to see what works best. A vignette in the study from AI fiction writing tool Sudowrite’s founder Amit Gupta laid out an issue they had with their original flat subscription-based pricing model: There were users paying $20 a month for the service, but their use of AI was costing the company $400 a month. They started charging by the word—and letting users develop custom tools—but that also could be more unsustainable if the users did a lot to modify those tools. Now they have a credit and usage-based model, but the company is still experimenting with it.

While decisions on pricing and value calculations often come from the CFO or CEO, input from the CIO—who best understands cost, usage and value of AI-driven functions—is vital to driving revenue growth through a company’s AI transition. CIOs also know which functions are needed for their enterprise, and which price increases may be worth budgeting for.

Use of AI and new technology depends on infrastructure as well as service, and updating the technological capacity of a place can be a huge undertaking. The Kraft Group, which owns businesses including the New England Patriots and their home field Gillette Stadium, recently signed a five-year agreement with infrastructure provider NWN to upgrade the stadium and other playing facilities. I talked to Kraft Group CIO Michael Israel and NWN CEO Jim Sullivan about how they are preparing these mega-facilities for a more connected future. An excerpt from our conversation is later in this newsletter.

The Clinton Clean Energy Center in Clinton, Illinois.

All of the things AI can do with computing need power, and a lot of it. This week, Meta made a deal to get the power it needs, signing a 20-year agreement to buy all of the power produced at a Constellation Energy nuclear plant in Clinton, Illinois. The agreement starts in June 2027—after an existing state agreement runs out—and will expand the plant’s output. Meta has prioritized finding sources of nuclear power, both with new plants and utilizing existing ones, to support its technology going forward. The company announced an RFP for nuclear energy developers in December, and says it has shortlisted potential new nuclear power resources.

This is the second deal a tech company has made with Constellation to redevelop its nuclear plants for AI.

© Forbes