Are free or heavily subsidized inference tokens an effective customer acquisition strategy for AI products?

Anish Acharya · Feb 9, 2026

Today's market distortion — zero or negative gross margin credits to let users try AI products — is a much healthier form of subsidy than 2021's, when startups recycled venture dollars into Google and Facebook ads

Ad spend was empty calories for the startup, whereas free/subsidized usage converts into high-paying power users

Scope: blended margins for AI-native companies do tend to be worse; says for the record he doesn't believe we're in a bubble period

27:19 20VC: Is SaaS Dead in a World of AI | Do Margins Matter Anymore | Is Triple, Triple, Double, Double Dead Today? | Who Wins the Dev Market: Cursor or Claude Code | Why We Are Not in an AI Bubble with Anish Acharya @ a16z

Harry Stebbings · Feb 9, 2026

For the best companies, inference is the new sales and marketing

Scope: relayed as Jason Lemkin's formulation

28:27 20VC: Is SaaS Dead in a World of AI | Do Margins Matter Anymore | Is Triple, Triple, Double, Double Dead Today? | Who Wins the Dev Market: Cursor or Claude Code | Why We Are Not in an AI Bubble with Anish Acharya @ a16z

Harry Stebbings · Apr 18, 2025

DeepSeek's retention numbers are bad — users are not staying with it

46:18 20VC: Foundation Models: Who Wins & Who Loses | How Economies and Labour Markets Need to Change in a World of AI | China vs the US in an AI Race: What You Need to Know | Rich Socher, Founder @ You.com

Amjad Masad · Apr 25, 2026

Free inference tokens are being used as a customer acquisition channel — the Claude Code and Codex hype of late 2025/early 2026 was largely driven by token giveaways

Every other day the limits were raised or tokens increased, which is how companies rope users in

Scope: open question whether those users retain

17:27 20Product: Replit CEO on Why Coding Models Are Plateauing | Why the SaaS Apocalypse is Justified: Will Incumbents Be Replaced? | Why IDEs Are Dead and Do PMs Survive the Next 3-5 Years with Amjad Masad

Andrew Ng · Nov 17, 2025

Much of today's AI coding is VC-subsidized and cannot continue forever, but durable non-subsidized businesses will emerge from it

Analogy to the early food delivery era in the US and China, where VC-subsidized eating eventually gave way to real economics; the laws of finance mean subsidy can't persist, but the value created is large and token costs should fall

31:49 Subsidy phase is temporary but durable businesses emerge from it