The Price of Intelligence Is Falling Faster Than Any Technology in History
The Price of Intelligence Is Falling Rapidly
Epoch AI's report finds the cost of a given level of AI performance has dropped about 47% per quarter for three years—a 13-fold decline annually, faster than any transformative technology ever. OpenAI's o3 cost $0.30 per question to hit 75% on GPQA Diamond in January 2025; GPT-5.6 Luna reached the same score for $0.0004 by mid-2026, a 725-fold drop in under 18 months. Frontier models are getting smarter and dramatically cheaper to run.
Over the past three years, the cost of a given level of AI performance has fallen an average of some 47% per quarter. That is a 13-fold drop every year – a faster rate than any other transformative technology in history.
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The actual report is by Epoch AI, which is financed by totally independent funds like (Eric) Schmidt Sciences.
Professor Tabarrok uncritically praises the report, which might lead to the conclusion that either human intelligence or moral standards are "falling rapidly".
- mvc
Why does electricity stop at 1973? It's been going back up again for the last few years.
- silverFork
Price of human intelligence is also falling rapidly. I suspect looking pretty is going to go up in value more rapidly.
- _superposition_
I love marginal revolution. But I'm not fond of the unit stated. I dont believe we're buying intelligence.
I'm sure marketing will run with it though.
- cs702
Yes, the price of inference is falling rapidly.
What about the cost? Inference looks like a viable business model for those operators that have access to SOTA model and serving infrastructure, but the investment required to have it is enormous, and appears to be never-ending, because if an operator stops investing aggressively, its model and serving infrastructure quickly become non-competitive, and customers will quickly leave for alternatives.