The Price of Intelligence Is Falling Rapidly
Summary
The Epoch AI report cited in the article states that the cost of achieving a given level of AI performance has fallen about 47% per quarter over the last three years, a roughly 13-fold drop per year. It notes frontier models are not only smarter but cheaper to run at a fixed performance, with examples like OpenAI o3 costing about $0.30 per question to reach 75% on GPQA Diamond in early 2025 and GPT-5.6 Luna around $0.0004 in mid-2026, suggesting cheaper inference and a reduced open-model threat. This reshapes the economics of deploying AI in business contexts.