AI is hitting a fixed benchmark performance level at a rapidly falling cost. Epoch AI measures a price decline of about 13x per year. After stripping out hardware gains and competition, MIT puts annual algorithmic progress at about 3x. That doesn't mean today's best models are cheaper, though. Reasoning models, for example, can cost more because they use far more compute per task. When picking a model for real-world use, quality, speed, and error rate matter just as much as price.
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