AI costs fall ~47% per quarter at constant performance, outpacing every past tech
FinanceYF5 · x · 2026-09-26
- Epoch AI data: since 2023, the cost of constant AI performance has dropped 47% per quarter — 4x faster than DNA sequencing, 6x computing, 18x lithium batteries, and 54x pre-1973 electricity price declines.
- Example: in Jan 2025 OpenAI o3 was first to top 25% on FrontierMath 1-3 at $0.55; 18 months later GPT-5.6 Luna matched it for $0.0015 — a 377x drop.
- Speed varies by domain: math cheapest to improve (50-52%/quarter), game puzzles slower (39-43%).
- Dataset covers 222 models on up to 11 benchmarks, using CAISI methods to estimate performance at different inference budgets.
- Costs fall fastest right after SOTA (66%/quarter), slowing to 32% two years later.
Related event: Epoch AI: Cost of Equal-Capability AI Drops 47% Per Quarter(5 posts)→
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