AI Pricing Knows What You Can Afford—And It’s Charging You Accordingly

It started with a bill. A $72 monthly fee for a storage unit in Brooklyn suddenly became $148—an increase of over 100% in less than a year. The concept of AI dynamic pricing was at play; the company, citing “dynamic pricing,” offered no explanation beyond referencing algorithmic demand shifts.

The concept of charging different people different prices is not new. Airlines have done it for decades. But today, as artificial intelligence and vast troves of personal data reshape commerce, AI dynamic pricing contributes to a more unsettling form of capitalism: one where the price of a seat, a ride, or a bottle of ketchup changes not just by the hour—but by who you are.

In theory, dynamic pricing simply matches supply with demand. In practice, it is morphing into something far more invasive—personalized pricing. AI models trained on consumer behavior can now determine what you might be able to pay, and then adjust the price upward, often in real-time. AI dynamic pricing therefore emerges as a significant tool in this strategy.

From Surge to Surveillance

Uber was among the first companies to mainstream this model with surge pricing—raising fares during peak demand. In New York City last year, commuters during a rainstorm were charged up to $265 for rides that typically cost under $50. Critics cried foul, but Uber stood firm.

But Uber’s pricing isn’t solely based on traffic patterns. Reports allege the company can determine whether your phone battery is low—suggesting you might be desperate—and adjust prices accordingly. In one study, two identical rides were priced 6% apart based solely on battery level.

Other companies are pushing the envelope even further. Delta Airlines, in a series of investor presentations, boasted about its partnership with Israeli AI firm Fetcher. The goal? A “super analyst” that works 24/7, learning from years of ticket data to optimize fares in real time. While Delta insists it uses only trip-related factors, Fetcher’s own materials champion AI-driven personalized pricing—tailored down to the individual.

The Data Gold Rush

Personalized pricing works because corporations know more about you than ever before. Retailers collect vast datasets through loyalty programs, social media monitoring, and partnerships with data brokers. Combine that with newly mandated age verification systems—where users upload government IDs to access age-gated content—and companies can now match emails to LinkedIn profiles, infer incomes, track locations, assess political affiliations, and even determine whether you rent or own your home.

“In theory, AI could read a social media post about your grandmother’s funeral, notice you’re booking a flight home, and increase the airfare,” says one data ethics expert. “Is it happening? Probably not yet. But the technology is already here.”

Walmart and Kroger: Quiet Transformations

Grocery chains are also reengineering the shopping experience with algorithmic precision. Walmart is rolling out digital shelf labels that can update prices every 10 seconds. A video recently surfaced showing pink-frosted cookies priced at $3.98—while the identical blue-frosted variety sold for $4.48.

The company says this improves customer transparency.

Kroger is taking it further. Its new shelf-length displays, which cycle through ads and prices, require shoppers to wait for the cost to appear. Some stores are tacking on “+10% at register” fees—turning listed prices into suggestions. Kroger says it is using AI to “enhance the customer journey.” What’s unclear is how many customers want that journey enhanced by AI dynamic pricing.

Kroger has also piloted facial recognition on these digital tags, theoretically to tailor in-store ads by age and gender. Public backlash forced the grocer to walk back claims about facial scanning, but their partner—Intelligence Node—remains a leader in AI-driven retail pricing.

Fast Food, Fast Pricing

At Wendy’s, AI-powered digital menu boards don’t just take your order. They suggest upsells and adapt pricing based on time of day, weather, and demand. In an earnings call, executives didn’t mince words: the technology is increasing the average check size. “We like what we’re seeing,” one senior leader said.

When pressed, Wendy’s denied using dynamic pricing. But internal slides from the same earnings presentation tell a different story. “Dynamic pricing,” they read plainly.

A Legal Gray Zone

Despite the mounting evidence, very little of this is technically illegal. U.S. law permits variable pricing, as long as it doesn’t discriminate on protected grounds. There are no federal statutes explicitly prohibiting algorithmic price targeting, including AI dynamic pricing strategies. Most state price gouging laws were written for post-disaster scenarios—after hurricanes, not data breaches.

In recent months, lawmakers in Washington have introduced bills to tackle personalized gouging. But many similar proposals have languished for years, never receiving a vote.

“This isn’t just capitalism,” says an antitrust researcher at Georgetown. “It’s surveillance capitalism. These companies know who you are, how much you make, and how badly you need what they’re selling.”

Exploitation, Optimized

In the corporate world, these algorithms are praised for maximizing revenue. One airline executive called inflation “a friend,” noting that AI dynamic pricing makes it easier to raise prices without customer pushback. Another said, “Now it’s not a matter of can we raise prices—it’s how much you’re willing to take.”

Retailers, meanwhile, continue to post record profits. Walmart posted $648 billion in revenue last year. Kroger’s data program tracks 62 million households. And Delta is training its pricing AI to handle 20% of domestic bookings by year’s end.

In a recent TikTok video, a frustrated shopper summed it up bluntly: “I just paid $17.33 for coffee. Two years ago, the same one was $9.92. We don’t have money. We’re living paycheck to paycheck. And this AI dynamic pricing just keeps finding new ways to squeeze us.”

For consumers, that’s the new reality. Prices will keep changing. But don’t expect them to get cheaper.

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Corrections & Amplifications:
Delta Airlines denies it uses personalized pricing based on user profiles. Kroger has said its digital displays do not use facial recognition, despite early test materials suggesting otherwise. (Aug. 8, 2025)