This Economist story touts the cleverness of Duolingo as a business that is under direct assault from ChatGPT and the like but are still coming ahead. Apparently, that is the model to follow for others who haven't been quite as lucky:
Duolingo, a language-learning app. ChatGPT can imitate a half-decent French tutor and the cost to users of an AI-induced error is low. Nevertheless, shareholders are starting to think of Duolingo as an AI winner. In September it unveiled a video-chat feature that lets customers practise their language skills with an AI-generated character called Lily. On November 6th this sarcastic, purple-haired avatar joined the firm’s earnings call and presented its results. Analysts and investors swooned; the firm’s share price rose by 6% over the next few days. As AI upends more industries, clever innovation is the best way for would-be victims to escape their fate
Goes to show that if your product is indistinguishable from free AI offerings, your business model is vulnerable. However, if you can differentiate through unique features, superior user experience, privacy, or human expertise, you can still build a viable business, even in an AI-dominated landscape. The challenge is to deliver enough additional value to justify the price, not just to match what free tools can do.