In free fall, AI costs are falling 10x every year, says OpenAI CEO

• • AI costs in freefall.
  • AI's future looks promising.
  • Innovation and fierce competition.

Artificial intelligence (AI) is rapidly becoming a transformative force across a range of industries, driven by technological advances and increasing accessibility. The CEO of OpenAI , Sam altman , in an optimistic forecast, revealed that the cost of implementing AI is decreasing by about 10 times each year, surpassing even Moore's Law, which predicted that the processing capacity of chips would double every two years.

This dramatic cost reduction has a significant impact on the democratization of AI, allowing companies of all sizes and even individual consumers to access technologies previously restricted to large corporations. Altman highlighted in his argument the example of OpenAI's models, whose implementation cost fell by about 150 times between the beginning of 2023 and the launch of GPT-4o in mid-2024.

“The cost of using a given level of AI drops by about 10x every 12 months, and lower prices lead to much more usage. You can see this in the cost of the token from GPT-4 in early 2023 to GPT-4o in mid-2024, where the price per token has dropped by about 150x in that time period. Moore’s law has changed the world by 2x every 18 months; that’s incredibly strong,” said Sam Altman in a statement. post from a blog shared on February 9th.

As AI becomes more accessible, the cost of many goods and services is likely to decrease, especially in those that rely on AI-based solutions, such as healthcare, automation, software development, and customer service. However, Altman warns that not everything will become cheaper. Luxury items and scarce resources, such as land, could see their costs increase, widening the gap between mass-market and exclusive luxury products.

“The price of many goods will eventually fall dramatically (at the moment, the cost of intelligence and the cost of energy constrain many things), and the price of luxury goods and some inherently limited resources, such as land, may rise even more dramatically,” he said.

Altman’s vision for the future is ambitious: by 2035, he hopes that every individual will have access to an intellectual potential equivalent to that of the entire population, driving creativity and innovation on a global scale. “Anyone in 2035 should be able to muster the intellectual capacity equivalent to everyone in 2025; everyone should have access to unlimited genius to direct as they wish. There is too much talent now without the resources to fully express itself, and if we change that, the resulting creative output of the world will lead to tremendous benefits for us all.”

As AI models become more affordable and widely available, companies and industries will face increasing competition, driven by the quest for innovation and efficiency. Artificial intelligence, with its plummeting costs, is transforming the global economic landscape, opening up new opportunities and challenges for businesses and individuals.