"We are absorbing the cost," said JB Park, CEO and President of Samsung Southwest Asia, on the long-term vision for Galaxy AI.
JB Park, CEO and President of Samsung Southwest Asia in a select media briefing in London
For years, the smartphone industry has operated on a principle where consumers paid upfront for the latest hardware, and the software benefits were bundled at no extra cost. Every camera upgrade, display enhancement, and new-gen processor factored into the retail price of the overall device. However, the dawn of generative AI (short for artificial intelligence) has fundamentally disrupted this economic principle for the industry.
The new-generation smartphones you see are no longer about hardware upgrades only, as software optimisation and the buzzword "AI" have taken much of the keynote presentations during the launches from every major brand. In simple words, the new-gen devices are active gateways to cloud-based neural networks that require continuous computational power long after the box is unsealed. And Samsung has been leading the pack with its Galaxy AI features that debuted in 2024, making a mark way before any smartphone brand thought it was so hard, including Apple.
When the Galaxy S24 series launched in January 2024, for many users, Call Assist, Call Screening, Writing Assist, and similar features were just additional features on the phone as part of the Galaxy AI feature bundle. But Samsung kept refining, and now, from real-time call translation and generative photo editing to intelligent note summarisation, Galaxy AI has become a good companion on phones that support it.
Yet, as millions of users around the world use these AI features where they generate AI images, translate real-time conversations, and ask queries to AI models, a quiet economic pressure has been building beneath the surface. Since running complex AI models requires high-performance GPUs and massive data centre infrastructure, which is an ongoing operational expense for brands, the traditional hardware margins were never designed to sustain indefinitely.
The tension between delivering AI experiences to users for free and managing escalating cloud infrastructure costs has sparked a crucial industry question: How long can mobile AI remain free, and what will monetisation look like when the bill comes due? To understand where the market is headed, Gadgets 360 spoke directly with JB Park, CEO and President of Samsung Southwest Asia, about the company's long-term monetisation roadmap for Galaxy AI.
Addressing the future of Galaxy AI monetisation, JB Park, President and CEO of Samsung Southwest Asia, provided a candid look into how Samsung balances user experience with backend compute economics. Park acknowledged that while Galaxy AI features are currently free for consumers, they represent a substantial cost for Samsung, even for features that appear on-device, like photo editing, due to the backend computing power required for heavy lifting.
"Galaxy AI features are free for consumers, but they are a huge cost for Samsung even though they might involve on-device features like Photo Editing. AI features require huge computing power," Park said.
"Based on which feature you use, for example for editing, it depends on the consumption of computing power. What we are trying and have learnt in the past few years is that some consumers are heavy users on the editing part, and it requires us to invest more in the data centre or the computing on GPU that will give a faster result," Park explained.
Samsung Galaxy Z Fold 8, Galaxy Z Fold 8 Ultra, and Galaxy Z Flip 8 (From left to right)
Interestingly, rather than forcing every user into a mandatory subscription wall, Park outlined a tiered freemium vision driven by consumer usage patterns where the basic tier for the masses will remain free, offering basic AI tools at no additional cost. Park added that roughly 90% of consumers stick to basic AI tools. For this vast majority, Samsung aims to keep standard Galaxy AI capabilities completely free and accessible.
"We are trying to absorb the cost. What if it (cost) goes beyond (a certain level)? Because of the industry changes, the consumer behaviour changes, what can happen in the future is, as I mentioned, there can be a feature that is free, a basic feature, and 90% of the consumers will only use that basic feature," Park explained.
He further added that for specialised, heavy-compute tasks, such as professional-grade media editing or intensive industry workflows, Samsung foresees offering a high-performance "Pro" tier available for a subscription or fee.
Park emphasised that Galaxy AI will not remain trapped behind premium paywalls or restricted exclusively to ultra-flagship foldables, like the Galaxy Z Fold series, or flagship phones like the Galaxy S series. Instead, Samsung plans to democratise the AI experience across broader price points while using the tiered model to manage infrastructure overhead.
JB Park's strategy for Galaxy AI offers a clear glimpse into the future of mobile software monetisation and gives a hint of where the industry is heading. Especially in a price-sensitive market like India, imposing a hard paywall on basic AI features would cripple adoption across any price band. By committing to free basic AI while expanding Galaxy AI to mid-tier devices, Samsung is likely to ensure that AI remains a key differentiator to drive hardware sales in high-growth regions.
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