The hidden inflation of AI: Why model collapse is a business risk

AI Briefing

• – AI models are causing inflation due to variable costs, changing pricing strategies, and the 'verification penalty' of human validation, leading to a 'unit economics trap' that threatens business viability.
• – Companies are rushing into AI adoption due to FOMO and pressure from boards, ignoring the structural unprofitability of some models.
• – Implementing dynamic model orchestration, which matches the cost of the model to the value of the query, can help protect margins and accelerate adoption responsibly.