AI inference will surpass the database market to become the largest software category. It is projected to reach about $350 billion by 2027. Usage costs will exceed platform fees for many applications. Gross margins will compress below classic SaaS norms. Infrastructure will dominate COGS for many software vendors. Customers bringing their own keys will trade revenue for margin. Frontier token prices rose from $0.96 to $11.25 in 18 months. GPT-6 Sol reset the frontier price tier to $4.00. Capability-adjusted token costs fall about 47% each quarter. Every application will effectively become an inference reseller.
What changed
Database market was the largest software category by revenue.
What it unlocks
Applications can now resell inference as a core revenue stream.
- $161b database market size
- $350b AI inference market by 2027
- $25b AI inference spend in 2025
- $130b AI inference spend in 2026
Sources