The cost of the smart home is going up

Selling the smart home has been hard. Even Amazon has lost money in the space, despite putting hundreds of millions of Echo devices in people’s homes. Google has also reportedly struggled to turn a profit from its substantial investment in Nest. But now Google is seeing dollar signs in the prospect of selling AI-driven subscriptions in the smart home. And it’s not alone.

At Google I/O this week, Google announced it’s expanding its Gemini for Home APIs to allow companies to integrate more of its Gemini-powered smart home features into their own apps. In a blog post, Google’s Ravi Akella, director of product management for the Home Platform, said this will enable “service providers and hardware manufacturers to build monetizable, proactive services that care for users and their homes.”

These features include those currently offered on its Google Home platform and Nest cameras, such as AI-generated text descriptions from cameras that tell you “a child is riding a bike on the lawn” rather than just “person detected,” and Ask Home, which lets you query your home with natural language, such as search your camera feeds to find when the UPS driver came by.

Google is also expanding access to its Home Brief 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 routines, such as “make my home look occupied when I’m not here.”

Companies like ADT and AT&T are already using Google’s Home APIs in their home security systems, and this expansion will allow third parties to put the Google Home Premium subscription and its related features into their own app and subscription services, according to Google.

So, now your ISP, wireless carrier, and home security provider could be selling you a smart home powered by Gemini AI and even build their own hardware to run it. Google also announced it’s allowing third parties to build smart speakers with Gemini built in, as well as security cameras that work with Gemini — something Walmart did with its Onn cameras last year.

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

But their revenue stream may become your subscription fatigue — and based on my experience with these new capabilities, there’s still a long way to go until they deliver real value. Today, it’s more like enhanced computer vision than genuine intelligence. And while more descriptive alerts can be useful, they can also be inaccurate. One AI-powered camera warned me of a brown bear in my backyard in coastal South Carolina. (It was my dog).

To really change the game for the smart home and become something worth paying for, AI needs to become proactive — understand context, and detect anomalies. Rather than you having to set up smart home routines to tell you when something happens, your home should understand what’s normal and flag what isn’t.

If your smart home can know that you left the gate open around the time you normally let the dog out into the yard, and alert you before the dog can escape, or detect that an elderly parent hasn’t moved around their home for a few hours and prompt you to check in, that could add real value. Ring has a new beta feature that works toward this: Unusual Event Alerts. It only notifies you about things it considers unusual — but this means there’s a risk it could miss something.

Reliably finding the anomalies and alerting you to them, rather than sending you an AI-generated essay about your home, is where real value lies. Google’s pitch promises “proactive services that care for users and their homes” — and while they may 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’s the other challenge. When and if AI in the smart home can deliver genuine value, I’m not convinced people will be willing to pay more for it. Subscription fatigue is real, and AI has already driven up the cost of smart home ownership. Amazon has started charging $20 a month for Alexa Plus if you don’t pay for Prime, and Google has put many Gemini for Home features behind a paywall.

Top-tier subscriptions from Ring, Google Nest, and camera company Arlo have risen sharply in recent years, all now boasting AI features. Ring’s has doubled from $100 in 2021 to $200 annually, and Google Nest’s has gone from $120 in 2021 to $200. Arlo’s yearly camera-only subscription rose from $117 in 2021 to $216 in 2025.

Of course, if you’re already paying for a home security monitoring plan (Ring’s $200 sub includes that), AI features can add value by solving a genuine pain point: filtering camera footage. The subscription increases are also due to higher costs for the companies. Many now offer 2k and 4k video — higher resolution is needed to process images more accurately — and running computer vision models isn’t cheap. But those higher costs don’t fully explain the price creep, and the question still remains: Are they worth it yet?

For years, companies have struggled to make money selling connected devices for the home. The intelligence boost promised by a new wave of AI techniques seemed like a life raft for the industry. But charging people more for features that haven’t yet proven their value isn’t the way to go.

That’s where Google’s bet that companies should use its AI tech to start charging you more seems premature. Add in that Google has a long history of abandoning developer platforms (see Works with Nest, Brillo, Weave, Android Things, Conversational Actions, I could go on), and any partner is betting twice: that the AI will get there and that Google will stick around long enough to see it through.

Meanwhile, backlash against features like Ring’s Search Party, which uses AI to search footage in the cloud, has opened people’s eyes to potential misuses and dangers of these technologies. As companies race to turn AI into that long-awaited business model, many consumers are turning 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: Those don’t come with a monthly bill.