AI Costs Plummet: Altman's Vision of Abundant Genius

OpenAI CEO Sam Altman has revealed that the cost of running each level of artificial intelligence (AI) falls by approximately ten-fold every year. This rapid decline in costs could lead to a significant decrease in the price of goods and services, as Altman explained in a recent blog post on AI economics.

Altman pointed out that the cost of using a given level of AI has fallen by around 150 times from OpenAI's GPT-4 model in early 2023 to GPT-4 in mid-2024. This rate of decline is dramatically faster than Moore's Law, which observes that the number of transistors in an integrated circuit doubles about every two years, leading to greater processing power, efficiency, and reduced costs for electronic devices.

Altman suggested that AI may turn out to be like the transistor economically, a big scientific discovery that scales well and seeps into almost every corner of the economy. He predicted that the price of many goods would eventually fall dramatically, as the cost of intelligence and energy currently constrains many aspects of production and consumption.

However, Altman also noted that the price of luxury goods and a few inherently limited resources like land may rise even more dramatically. To ensure that the benefits of AI are distributed equitably, Altman is open to exploring ideas like providing "compute budgets" to enable everyone on Earth to use a lot of AI.

Altman's vision is to continuously drive down the cost of AI, with the goal that by 2035, any individual should have access to intellectual capacity equivalent to everyone in 2025. This would democratize access to AI capabilities, allowing individuals to harness the power of "unlimited genius" to direct their lives and work as they imagine.

The cost of AI has been a hot topic in recent months, with the launch of the latest low-cost AI model from Chinese developer DeepSeek causing a stir in stock markets. US companies such as Nvidia, which produces higher-cost hardware, experienced significant declines in their stock prices. Meanwhile, Chinese automakers, technology, and leading telecoms firms have already begun integrating the DeepSeek AI model into their offerings.