Agentic AI is becoming table stakes, but the pricing model is broken for HR tech vendors.
Given that platforms like ChatGPT are free for most HR tech users—or built into the existing fee structures for HR tech platforms—I fear that tying it to a zero-cost model may inadvertently propel HR tech AI into a fate similar to that of recorded music after Napster and the rise of music streaming.
Napster proved to the world that music can be free, and the music industry never recovered from it. Record stores closed, artists suffered, and the music market was flooded with even more music, all of which was still available for free. Even decades later, when services like Apple Music and Spotify began to pop up, charging via a subscription or pay-per-play model, the product—a song or album—had been so substantially devalued that a single stream is generally between $0.003 and $0.005 per stream in 2025, which is about $3,000 to $5,000 for one million streams. This is a far cry from the roughly $1 million you’d earn from the sale of 100,000 records in 1999, when Napster was introduced (~$2 million today, adjusted for inflation).
In the end, only larger artists have the bargaining and legal leverage to negotiate a better deal with these platforms. But even then, they’ve taken an enormous pay cut in terms of profits from listenership. The perceived value of “free” is now what dominates the industry, with either free or nearly free services as the primary options for most consumers.
In the HR technology space, most vendors include AI as part of their overall pricing model or offer it at no additional cost. This creates a spending attitude that assumes this technology is free and will always be. When you have a high-quality product with low friction for adoption, and then factor in the demands of more advanced AI on infrastructure, such as servers, energy sources, and maintenance, I wonder how long the industry will be able to eat the cost.
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