The cost of the smart home is rising

Selling the smart home has been tough. until Amazon has lost money In space, despite placing hundreds of millions of echo devices in people’s homes. Google has it too He reportedly struggled To convert a large profit Investing in Nest. But Google is now seeing dollar signs in the potential for selling AI-driven smart home subscriptions. And she is not alone.

At the Google I/O conference this week, Google announced It expands Gemini for home APIs To allow companies to integrate more Gemini-powered smart home features into their own applications. In a blog postThis will enable “service providers and device manufacturers to create proactive, monetizable services that take care of users and their homes,” said Ravi Akila, director of product management for Google Home.

These features include those currently available on Google Home and Nest cameraslike Text descriptions generated by artificial intelligence From cameras that tell you that “a child is riding a bike in the park” instead of just “someone has been detected”, and Ask Homewhich allows you to inquire about your home in natural language, such as searching your home Camera feeds To find out when the UPS driver came.

Google is also expanding access to its Home Summary feature, which summarizes what happened around your home at the end of each day, to third parties, and adding the ability to use… Natural language to create routinessuch as “Make my house look busy when I’m not here.”

Companies like ADT and AT&T They already use Google Home APIs in their home security systems, and this expansion will allow third parties to put the Google Home Premium subscription and related features into their own apps and subscription services, according to Google.

So, now your ISP, wireless carrier, and home security provider can sell you a Gemini AI-powered smart home and even build their own hardware to run it. Google also announced this Allowing third parties to build smart speakers with Gemini built-inPlus security cameras work with Gemini, which is what Walmart did with it Cameras on last year.

The push toward subscription models is part of a broader shift in smart home — the hope that new AI capabilities will finally provide a sustainable revenue stream for smart home companies.

But their revenue stream may become overwhelmed by your subscription – and accordingly My experience with these new capabilitiesThere is still a long way to go until they offer real value. Today, it’s more like enhanced computer vision than real intelligence. Although more descriptive alerts can be helpful, they can also be inaccurate. An AI-powered camera warned me of a brown bear in my backyard in coastal South Carolina. (It was my dog).

For us to be a game-changer for the smart home and become something worth paying for, AI needs to become proactive – understanding context, detecting anomalies. Instead of having to set up smart home routines to tell you when something is going on, your home should understand what’s normal and flag what’s abnormal.

If your smart home knows you’ve left the gate open when you normally let your dog out into the yard, it will alert you before A dog could run away, or discover that an elderly parent hasn’t moved around their house for a few hours and ask you to check in, which can add real value. Ring has a new beta feature that makes this happen: Unusual event alerts. It only informs you of things it considers unusual – but that means there’s a risk you could miss something.

Reliably finding and alerting you to anomalies, rather than having AI send you an article about your house, is where the real value lies. Google promises “proactive services that take care of users and their homes” — and while they might argue that filtering notifications using computer vision is proactive, that’s only part of the solution.

The rising costs of smart home ownership

Then there is the other challenge. When and if AI in the smart home is able to deliver real value, I’m not convinced people will be willing to pay more for it. Subscription fatigue is real, and AI is already raising the cost of smart home ownership. Amazon It started charging $20 a month for Alexa Plus if you didn’t pay for Prime, and Google It has put many of Gemini for Home’s features behind a paywall.

Subscriptions for the upper class bell, google nest, And the camera company Arlo It has risen sharply in recent years, all the more so now Featuring artificial intelligence features. The ring Doubled From $100 in 2021 to $200 per year, Google Nest is gone From $120 in 2021 to $200. Arlo’s annual camera-only subscription is up from $117 in 2021 To $216 in 2025.

Of course, if you’re already paying for a home security monitoring plan (Ring’s $200 plan includes it), AI features can add value by solving a real pain point: Filter camera shots. Subscription increases are also due to higher costs for businesses. Many now offer 2k and 4k video — higher resolutions are needed to process images more accurately — and computer vision models aren’t cheap to run. But these high costs do not fully explain the high prices, and the question remains: Are these costs worth it yet?

For many years, companies have struggled to make money selling home-connected devices. The intelligence boost promised by a new wave of AI technologies seemed like a lifeline for the industry. But charging people extra for features that haven’t yet proven their value isn’t the best solution.

This is where Google’s bet that companies should use its AI technology to start charging you more seems premature. Additionally, Google has a long history of abandoning developer platforms (see Works with Nest, Shine, weave, Robot stuff, Conversation actionsI can I continue), and any partner is betting twice: that AI will get there and that Google will stay there long enough to make it happen.

Meanwhile, backlash against features such as Ring search partyWhich uses artificial intelligence to search footage in the cloud, has opened people’s eyes to the misuse of these technologies and their potential dangers. As companies race to turn AI into a long-awaited business model, many consumers are moving away from pushing more of their data to the cloud, toward… Cameras and services that operate locally In their homes. An added benefit for consumers: These don’t come with a monthly bill.