Test-time compute (inference scaling) is the new frontier. Models that “think longer” (o1, DeepSeek R1, Claude thinking) deliver better results but consume 10-100x more compute per query.
The Pattern
Monetize the compute-for-quality trade-off at inference time.
How It Works
Offer tiered inference: fast/cheap vs. thoughtful/premium
Charge based on compute consumed, not just queries processed
Enable customers to select the quality level per use case
Case Studies
OpenAI’s o1: More inference compute yields better reasoning
Anthropic’s Claude extended thinking: Trades compute for quality
A “thinking” query might use 100x the compute of a simple response. Usage-based pricing captures this difference. The model naturally surfaces upsell opportunities as customers discover which queries benefit from extended reasoning.
Strategic Implication
Training was a one-time cost. Inference is ongoing and scaling. The companies optimizing inference economics will capture the growth.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
