AI performance costs are falling faster than those of any previous technology
AI performance is reaching fixed benchmarks at rapidly declining costs, with prices falling approximately 13x per year according to Epoch AI data. When hardware and competition effects are removed, algorithmic progress alone accounts for about 3x annual improvement, though specialized reasoning models may cost more due to higher compute requirements.
Why it matters
Faster cost declines make AI tools more accessible and affordable for businesses and individuals, expanding where and how AI can be practically deployed.
