This is exactly it.

The VCs are following a well worn script - the freemium model worked well for SaaS.

The problem is that the cost of customer acquisition in SaaS is high relative to the long term profitability of the customer, while for AI it’s the inverse - the more the customer uses the product, the more cost they generate for the AI provider. Unless that cost can be returned to the customer, in the form of per-token billing, the math doesn’t work out to a positive income.

So not only do you have a sharp increase in cost when the company stops burning VC money and needs actual revenue from customers, but the increase goes from a flat rate to a pay as you go. GitHub Copilot made a change like that earlier this year and caused havoc, but i think that the token rate is still lower than cost.