Epoch AI says AI output costs are falling fast enough to reshape vendor economics
The report puts the drop at just under 50% per quarter, with different benchmarks moving at different speeds.
Epoch AI says the cost of getting useful AI output has been dropping so quickly that it is now changing the economics of model vendors and third-party AI services. The report estimates that AI is a little under 50% cheaper each quarter and about 13 times cheaper over a year, with the total decline reaching hundreds of thousands of times in five years. It also finds that the pace varies a lot by benchmark: GPQA Diamond, chess, mathematics, and Frontier Math do not follow the same curve, and the quarterly drop has slowed from 66% to 32% over two years. Epoch AI says it measured models that reached at least 81.25% on GPQA Diamond and priced the cost per question, while also warning that benchmark-targeted training could distort the results.
Why it matters
For model vendors and AI service providers, pricing pressure is no longer a distant trend; the cost of producing useful output is moving down quickly enough to alter their economics. The report also suggests those gains are uneven, so a single benchmark no longer tells the full story of how fast AI is getting cheaper.
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Sources
- Tom's Hardware