The Price of Intelligence Is Falling Rapidly

The cost of achieving a given level of AI performance has fallen approximately 47% per quarter over the past three years—a 13-fold annual decline faster than any other transformative technology in history. For example, the cost to achieve 75% accuracy on a benchmark test dropped roughly 725-fold between January 2025 and mid-2026. This dramatic decrease in inference costs means frontier AI models are becoming both more capable and significantly cheaper to operate, which may limit the competitive threat posed by open-source models.