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Foundations · AI line

Whose unit: your supplier's meter and yours

5 min on the light depth

The frame

If your product runs on a model provider, you buy in the provider’s unit: tokens, calls or compute time. That unit is the provider’s value metric, the unit of work its price attaches to. It measures what you consume, and nothing about what your customer gets. Every layer built on a supplier’s unit meets the same choice. Pass-through keeps the supplier’s unit on your customer’s invoice. Recast means you price your own unit, the record enriched or the task completed, and the supplier’s cost becomes yours to manage. In an AI product the choice is made in the agent harness, the runtime layer that turns the model’s output into finished work. The provider’s API has a pricing model of its own; the application on top prices its own value.

Pass-through is the default, and it is rarely chosen. The billing stack already counts the supplier’s unit, so the first version of your AI line bills in it, and your margin then moves whenever the supplier’s price moves. Ask which unit is on your customer’s invoice today and whether anyone decided to put it there. Pass-through fits when what your customer buys is the supplier’s unit with plumbing around it. Once your product does the work, that unit no longer names what the customer values.

Pass through or recast argues that every layer built on a supplier’s unit meets this choice, and that the industry met it before under per-call API pricing and embedded-component licensing. What is an agent harness defines the layer and shows the commercial question is an old one: selling in your units while buying in a supplier’s. API pricing argues that per-call pricing worked while every call was the same work, and broke when the call became a unit of work.

If your model provider renamed or repriced its unit next quarter, would your pricebook have to change?

Three things to say in the room this week

  • Our model provider's unit measures what we buy; our customers should pay in a unit that measures what they get.
  • If our supplier renamed or repriced its unit tomorrow, I want to know whether our pricebook would have to change.
  • Passing our supplier's unit through or pricing our own is a licensing decision, and we should make it deliberately.

Core reading

Go deeper: the heavy depth

Read the core in this order.

  • Pass through or recast. Keep the supplier’s unit or define your own, a decision software has faced before; the value metric comes before packaging and the number.
  • What is an agent harness. Defines the runtime layer that lets a language model act as an agent, separates the shipped harness from the one a buyer assembles, and names what you charge for.
  • API pricing: when the call became a unit of work. Per-call pricing worked while every call was the same work and broke when business logic moved in; token-denominated products now face the same decision.

Then the shelf, lighter.

  • Inner and outer agent harness pricing. The layer you expose to customers sets your value metric; pricing power is at the outer layer.
  • Bring your own model is a licensing decision. Once the customer supplies the model, a unit with LLM inference blended in keeps counting and stops meaning.
  • The acquired metric: meld or pass through. An acquired product arrives with a value metric someone else chose.
  • Who owns your meter now. Billing consolidation decides who controls the unit you charge on.
  • Thin wrapper AI product margin. A launch margin measures a launch condition; your price anchored to the supplier’s cost falls with it.
  • When your credit spends in someone else’s product. OpenAI’s plan sharing and marketplace show the supplier’s unit reaching your customer past your pricebook.

The research hub on AI, cloud and resource-based pricing holds the peer-reviewed work behind this module, each paper described by provenance with a written ceiling on what it may be cited for.

The AI track closes here and rejoins the path at Stage 2, your own record: your price list and closed deals, where your invoices show which door was taken.

The shelf

Which depth did you take?