Comment by Danox
5 days ago
Google, Microsoft, Meta, Anthropic, OpenAI, Oracle and others are going to be looking to recoup all the money that they’ve spent to date. Why would the price go down in the future?
5 days ago
Google, Microsoft, Meta, Anthropic, OpenAI, Oracle and others are going to be looking to recoup all the money that they’ve spent to date. Why would the price go down in the future?
> Why would the price go down in the future?
Because price is driven mainly by competition, not by a desire to recoup prior spending.
Investors aren't doing things out of the sheer goodness of their hearts, so if they could just bump the price up they'd have already forced it up. The very existence of workable local models puts a cap on how high the price can realistically go, but the high level of competition still extant makes the price floor ever closer to the actual cost to generate tokens.
The AI numbers are huge, but I remember similar arguments about residential high-speed internet. According to Gemini, the "price for internet" is down 12% in real terms (ugh, capitalism!), while speeds are staggeringly faster.
The providers have spent a fortune on wireless, pulled a lot of fiber/cable, and it's cheaper than it was when it started.