Ai Tool

How Profitable Is An Ai Tool? (Updated for 2024)

Pat Walls

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Updated: September 11th, 2024

How Profitable Is An Ai Tool? (Updated for 2024)

So you want to start an AI tool?

And the first question that came to your mind was, “well, are AI tools actually profitable?”

With a market size of $58.3B - there’s plenty of business to go around.

Especially considering:

You could start a AI tool with as low as $99
Based on our data, AI tools generate an average of $3.57M per year
You could see gross margins as high as 82% with AI tools

There’s money to be made. Don’t worry.

But, I don't want to spoil it all. Below we’ll cover everything you need to know when it comes to the profitability of a AI tool.

Let’s dive in!

Is an AI tool profitable?

Yes, an AI tool is generally a profitable business. However, you still need to consider several factors since these things always impact the overall outcome.

For instance, since average revenue is $3.57M per year with an estimated gross margin of 83%, you could expect to recover your investment within 12 months or even less.

But of course, it all comes down to how much you earn compared to the potential revenues of your AI tool.

To determine whether your business is profitable, you should earn more than your expenses in the beginning months. However, while you're in your first month, it can be challenging to know what to expect.

Therefore, you should maintain a record of your monthly expenses and income to determine whether you're meeting your goals. By doing this step, you can see how your AI tool is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is an AI tool worth it?

If you’re wondering if a AI tool is worth it, the answer is a big YES. With AI tools, you have the potential to earn $3.57M per year (this is based on data reported by real founders).

Further, you could have your initial investment back within months. Simply put, it’s a business worth a shot, especially if you have the resources and make the necessary efforts to achieve or surpass the target.

With a market size of $58.3B, it will be possible for you to build something that grows and turns into a flourishing business. As such, it’s the type of business you might want to consider starting.

Of course, you must learn and understand every aspect of running a AI tool to ensure success. Still, as long as you have the initial investment and can endure a few months before your actual gains, this business could be worth it.

You might want to consider reading more specifics about successful AI tools case studies.

Examples Of Profitable Ai Tools

Here are a few examples of profitable AI tools, and a few more details about them:

1. Yellow AI ($36M/year)

Raghavendra Kumar Ravinutala and Jaya Kishore Reddy, co-founders of Yellow.ai, conceived their idea during the smartphone boom in India post-2011.

Observing the potential for user engagement through mobile apps, they identified a gap in connecting these apps with enterprises.

Despite conversational AI being a nascent field in the country, Raghu and Kishore envisioned creating a bridge between mobile apps and enterprise systems, laying the foundation for their innovative product.

Is it profitable? Yes
How much money it makes: $36M/year

How Raghu Ravinutala Built Yellow AI to $40M ARR

Yellow.ai provides a case study on growing from a side project to a full-scale AI enterprise generating $36 million annually through AI-powered chatbots and strategic marketing techniques, making it a must-read for aspiring entrepreneurs.

Read this case study

Read by 404 founders

2. Zeeg AI ($48K/year)

Enema Onojah John, a former mechanic turned digital marketing consultant, founded Zeeg AI in March 2023 to streamline content creation for businesses. Within just three months, Zeeg AI exceeded 12,000 active users and generated over $4,000 in monthly revenue.

Is it profitable? Yes
How much money it makes: $48K/year
How much did it cost to start: $3K

My AI-Writing Tool Crossed 12K Users And $4K In MRR

Zeeg AI is an all-in-one AI software solution that solves multiple daily problems for businesses and marketers, with features including copywriting, content marketing, SEO keyword research, AI speech-to-text, text-to-speech, and image editing, and has already gained over 12,000 active users and generated $4,000 in monthly revenue in just three months.

Read this case study

Read by 1,548 founders

3. My AskAI ($300K/year)

After leaving his nearly decade-long finance career and spending years contracting at tech companies, the co-founder of My AskAI saw his breakthrough when experimenting with GPT-3 technology. Teaming up with a colleague, they initially created tools like a university personal statement generator and No Code AI Model Builder before pivoting to My AskAI, which now makes $25k/month and handles AI customer support for SaaS businesses.

Is it profitable? Yes
What's the gross margin? 82%
How much money it makes: $300K/year
How much did it cost to start: $99

I Built A $300K/Year AI Business For Less $50 Bucks

Case study of a co-founder's journey from finance to tech entrepreneur, successfully launching a revolutionary AI chatbot for customer support that earns $25k/mo, with impressive margins and a 3% conversion rate drawing customers away from bigger competitors.

Read this case study

Read by 9,158 founders

Learn more about starting an AI tool:

Where to start?

-> How much does it cost to start an AI tool?
-> Pros and cons of an AI tool

Need inspiration?

-> Other AI tool success stories
-> Marketing ideas for an AI tool

Other resources

How much can you make with an AI tool?

With a AI tool, you can make an average of $3.57M revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $99. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 12 months.

How much does a AI tool make a week?

Based on our data, average weekly revenue for a AI tool ranges around $74.3K. As such, you could see monthly revenues of $297K.

To know if your AI tool achieves the weekly profit target, you need to keep track of the total earnings you get per day. Afterward, you'll want to consider subtracting the expenses you have daily.

Learning your weekly profit can also show whether you're hitting your target goal for your AI tool.

How much do AI tools owners make?

The income of an AI tool owner can vary depending on various factors such as location, size, competition, and the owner's business skills.

But to give you some idea, the weekly revenue of an established AI tool is about $74.3K. But this can be lower or higher depending on so many factors - it's almost impossible to say exactly.

While the potential for earning a good income as an AI tool owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Ai Tool Profit Margins

Generally speaking, an AI tool can expect profit margin of around 83%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of an AI tool, profit margins can vary depending on various factors, such as the type and quality of products sold, the size of the store, and the level of competition in the area.

However, these figures can vary depending on the pricing strategy, inventory management, and overall efficiency of the business. To maintain healthy profit margins, AI tool owners must focus on managing costs, negotiating favorable supplier terms, and providing high-quality products and services to attract and retain customers. By doing so, AI tool owners can ensure long-term sustainability and profitability for their business.

Ai tool owner salary

The salary of an AI tool owner is an unpredictable figure. It's significantly influenced by numerous factors, including the store's location, its size, and the degree of competition. An owner of a well-established AI tool, in a prime position, might see an average weekly salary around the ballpark of $61.7K.

But it's worth noting, such numbers aren't always consistent. The earnings can vary wildly, potentially swinging by as much as 80% either way.

Achieving consistent success and maintaining a reliable income stream in this industry requires a deep commitment. It's imperative to offer high-quality products, deliver impeccable customer service, and nurture a trusted bond with the community you serve.

Conclusion

In a nutshell, based on many of our examples, a AI tool may be a promising business to start - but the success of your AI tool mostly depends on your effort and your approach.

If you focus on these, you'll have a much higher chance of a profitable AI tool.

Part of

Building An Ai Tool: Everything You Need To Know

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