SaaS is pretty much the only possible business model for AI, the data/model have to be centralized. Although I suppose he could provide a Docker image or something for tech people to play around with, it'd inevitably get ripped off and he'd spend all his time taking down copycats.

I don't particularly like charging for SVG and different sizes/colors, but it seems to be the standard for logo-making websites. Although I can turn a PNG into SVG in a few minutes with Inkscape/potrace, the target demographic probably has never heard of Inkscape and would pay $15 on fiverr or something for a quick Adobe job. So as usual the business is basically scamming ignorant fools.

Maybe an alternative is ads, I'd run an experiment for a few weeks. B2B ads pay absurdly high and hardware is cheap, so they should be able to pay hosting bills or whatever. And then you have a few years of runway to find a decent business model.

For higher tiers, charging for high usage seems reasonable, maybe there's an interest in a logo API.

I'd also look at cross-selling things like SEO, A/B testing, domain name registration, and general website design as part of a package, basically an affiliate program. https://www.pixelslogodesign.com/ looks reasonable although maybe too high-end since they have employees rather than freelancers. But charging $50 for ML logo design + $25 of fiverr labor seems reasonable.

What other business models would you recommend? We are still pretty new and are open to suggestions. Moreover, we are still a very small team and it's easy for us to change our business model. SaaS seemed to be the best, so we went with it.

I am a strong believer in open-source and against rental/pay-per-use, so if there is some way to work that into your product that would be cool. People should be able to buy a product and run/use it at their leisure. But don't go and kill your profitability on my account...