Nasr Khan

16 AI

AI commitment stress test

How much AI usage should we commit to before the discount turns into money we never use?

For CFOs, procurement leads and CEOs with an AI quote on the table. Takes about four minutes. Opens with an example.

The quote and your usage

1The quote

Picking one fills typical units and prices. Change them to match your quote.

How the commitment works

$
$
$
2Your usage
3What could change

AI prices have fallen fast. Your vendor's may not. Enter your own view.

The answer

Commit less

How much to commit

    Balance left to use, month by month

    Each scenario, over the contract

    Cash out, base case

    With the commitmentPaying as you go

    Ask for these before you sign

      Take the result with you

      A PDF report with your inputs, results, charts and method. Or the same as plain text for an email.

      How this tool works

      What it does

      AI vendors give a discount if you commit in advance: prepaid money, a fixed pack of units, or a minimum spend. The discount only pays if you use what you commit.

      This tool runs the quote month by month under a low, base and high case. It adds the risks you choose: falling prices, a cheaper model, a workflow that stops. Then it shows how much you can commit safely.

      What you enter

      • The quote. The commitment, discount, payment timing, expiry, rollover and any free credits.
      • Your usage. Full monthly use, how fast you get there, growth, and how far the low and high cases sit from the base.
      • What could change. The yearly price change, a move to a cheaper model, and a workflow being switched off.

      What you get

      • A commitment ruler: the amount you use in full even in a slow year, and the amount where the deal stops beating pay-as-you-go.
      • The balance month by month, with what expires unused.
      • What to ask for before you sign, and a PDF for procurement.

      Try it: switch from prepaid money to a fixed unit pack. The break-even use rises from 80% to about 90%, because falling prices eat into a pack's discount.

      The maths, assumptions and sources

      Usage each month = full use × the ramp (a straight line from month 1 to full use) × growth after the ramp, then × the low or high share. The pay-as-you-go price changes smoothly at the yearly rate you enter. A cheaper model takes its share of usage at its own price from the month you choose.

      Prepaid money is drawn at the discounted price of the day, so price cuts make it last longer. A unit pack buys units at today's discounted price, and usage on a cheaper model falls outside it. A minimum spend bills usage at the discounted price and adds a true-up when spend falls short. Cost = what you pay, less any balance that carries into a renewal. The safe commitment is the largest amount fully used in the low case. The ceiling is the largest amount whose cost stays at or below paying as you go.

      This is a planning model, not a forecast. It uses your quote and your scenarios, not a database of vendor prices.

      See answer