AI-powered apps can make money, but struggle with long-term retention, new data shows

Published: 12 hours ago (March 10, 2026 at 02:42 PM EDT)

3 min read

Source: TechCrunch

AI‑powered apps can make money, but struggle with long‑term retention

With the top app stores flooded with AI apps, developers may think the best bet for turning a profit is to integrate artificial intelligence technology into their own products. However, a new study focused on the subscription app ecosystem across iOS, Android, and web calls that assumption into question.

RevenueCat, a company that offers subscription management tools used by over 75,000 app developers, released its 2026 State of Subscription Apps Report. The report shows that AI integration is not a guarantee of long‑term retention. AI‑powered apps churn (annual subscription cancellations) 30 % faster than non‑AI apps, at the median.

Scope of the data

The analysis covers subscription app providers that use RevenueCat’s tools to manage more than 1 billion in‑app transactions.
These transactions generate over $11 billion in revenue for developers annually, making the dataset a healthy sample for trend analysis.

AI adoption among apps

AI‑powered apps account for 27.1 % of apps across all categories; non‑AI apps make up 72.9 %.
Roughly one in four apps is now AI‑powered.
The category includes not only chatbots like ChatGPT and Gemini but any app that markets itself as AI‑powered.

AI apps by category
Image credit: RevenueCat

Photo & Video apps have the largest share of AI‑powered apps (61.4 %).
Gaming has the smallest share (6.2 %).
Travel (12.3 %) and Business (19.1 %) are also low‑AI segments.

Retention performance

Annual retention

AI apps: 21.1 %
Non‑AI apps: 30.7 %

Monthly retention

AI apps: 6.1 %
Non‑AI apps: 9.5 % (difference of 3.4 percentage points)

Weekly retention (the only area where AI leads)

AI apps: 2.5 %
Non‑AI apps: 1.7 %

AI vs. non‑AI apps retention rates
Image credit: RevenueCat

These metrics may be influenced by the rapidly changing state of AI technology, prompting users to hop between different AI apps as they search for the most up‑to‑date experience.

Subscription plan types

AI vs. non‑AI apps by subscription plan type
Image credit: RevenueCat

Refund rates and revenue volatility

Median refund rate for AI apps: 4.2 % vs. 3.5 % for non‑AI apps (20 % higher).
Upper‑bound refund rate: 15.6 % for AI apps vs. 12.5 % for non‑AI apps.

The higher refund rates suggest “greater volatility in realized revenue and deeper issues in user value, experience, and long‑term quality.”

Refund rate illustration
Image credit: RevenueCat

Monetization advantages of AI‑powered apps

Trial‑to‑paid conversion: AI apps convert 52 % better than non‑AI apps (median 8.5 % vs. 5.6 %).
Monetization of downloads: AI apps achieve about 20 % higher monetization (median 2.4 % vs. 2.0 %).
Realized Lifetime Value (RLTV):
- Monthly RLTV: AI apps median $18.92 vs. non‑AI $13.59 (≈ 39 % higher).
- Annual RLTV: AI apps median $30.16 vs. non‑AI $21.37 (≈ 41 % higher).

Takeaway

AI can drive strong, early monetization for apps, but these apps struggle to retain users and sustain value over time. Developers should weigh the short‑term revenue boost against the challenges of long‑term retention and higher refund rates.