Tuhin Srivastava, CEO of AI infrastructure company Baseten, has a blunt message for founders: The era of AI as a bolted-on feature is over. If you're not embedding intelligence deeply into your core product, your company faces an "extinction moment" as users come to expect — and demand — smarter everything.

His warning comes from a powerful economic principle: Jevon's Paradox. Sarah Guo, co-host of No Priors, framed it neatly: “If you decrease the cost of a good, say intelligence as a good, people actually consume more of it.” Srivastava sees this playing out dramatically in AI. As inference costs plummet, demand doesn't just increase proportionally; it explodes.

Key Takeaways

  • Jevon's Paradox applies intensely to AI: reducing the cost of intelligence leads to a massive, disproportional increase in demand and consumption.
  • Developers will embed “a hell of a lot more intelligence” into applications when inference becomes cheaper, moving beyond simple features to richer, longer-running AI agents.
  • This shift will lead to “concierge everything for everyone,” where personalized AI agents handle complex tasks across various aspects of daily life.
  • Companies that fail to fundamentally integrate intelligence into their workflows and software will face an "extinction moment" as users demand smarter, AI-driven experiences.

Cheaper Intelligence Drives Insatiable Demand

Forget the idea that AI integration is about adding a single smart feature. Srivastava argues that as inference costs drop, developers don't just add some AI; they add "a hell of a lot more intelligence." This means AI agents that run longer, handle more complex sequences, and deliver richer user experiences. It's a feedback loop: cheaper compute unlocks more ambitious AI applications, which in turn drives demand for even more compute.

“I think the more we drive down the costs,” Srivastava explained, “what they realize is more intelligence just means better user experience.” This isn't theoretical. He sees Baseten customers, who are already at the cutting edge of AI deployment, continually pushing the boundaries of what they embed into their products. They start with a baseline model or quality of answer, but as costs fall, they find new ways to inject more intelligence, making their applications smarter, more responsive, and ultimately, more valuable to users.

The 'Concierge Everything' Future (and Your Extinction Moment)

What does this insatiable demand for intelligence look like? Srivastava envisions a future where AI enables "concierge everything for everyone." Imagine personalized agents managing your healthcare, finances, education, and daily tasks with a level of bespoke attention previously reserved for the ultra-wealthy. “For the consumers, it's the best possible thing,” he says. “Everything is somewhat smarter... your doctors have access to better tools.”

But for companies, this vision carries a sharp edge. The Baseten CEO doesn't pull punches: “I think if you don't embrace this, I think it's the extinction moment for a bunch of folks.” This isn't about slapping a chatbot onto your existing product. It's about reimagining core workflows and software assuming intelligence is a fundamental, abundant resource. “All these workflow and software companies need to figure out what is the intelligent or intelligent inserted versions that drive the user value for those end consumers,” Srivastava stresses.

This means every piece of software, every workflow, every touchpoint must be infused with intelligence to deliver unprecedented user value. If your solution isn't dramatically smarter than yesterday's, it won't just be less competitive; it will be obsolete.

What to Do With This

Stop planning for incremental AI features. Instead, pick one critical user workflow in your product and design it from scratch, assuming intelligence is virtually free. Build a proof-of-concept for an "intelligent-inserted version" of that workflow this week, focusing on agentic behavior and how it delivers a "concierge-level" experience. Your goal isn't just to make it better, but fundamentally smarter, anticipating user needs and automating complex steps that were previously impossible without immense human effort.