AI is going to become cheaper to use, says Sam Altman.
The CEO of OpenAI said in a blog post that the cost of using AI will drop by 10 times every year.
OpenAI announced Stargate, a $500 billion AI infrastructure investment project, in January.
Sam Altman, the CEO of OpenAI, says AI will be used more frequently as its costs continue to plummet.
“The cost to use a given level of AI falls about 10x every 12 months, and lower prices lead to much more use,” Altman wrote in a blog post on Sunday.
“You can see this in the token cost from GPT-4 in early 2023 to GPT-4o in mid-2024, where the price per token dropped about 150x in that time period,” he added. “Moore’s law changed the world at 2x every 18 months; this is unbelievably stronger.”
That was one of the three observations Altman made in his post, which focused on the development of AI.
Besides cost, Altman said that an AI model’s intelligence is equal to the amount of resources used to develop it.
“It appears that you can spend arbitrary amounts of money and get continuous and predictable gains; the scaling laws that predict this are accurate over many orders of magnitude,” Altman wrote.
Altman also said that there would be “no reason for exponentially increasing investment to stop in the near future” since the intelligence of AI models is growing at a “super-exponential” rate.
“If these three observations continue to hold true, the impacts on society will be significant,” Altman wrote.
“The price of many goods will eventually fall dramatically (right now, the cost of intelligence and the cost of energy constrain a lot of things), and the price of luxury goods and a few inherently limited resources like land may rise even more dramatically,” he added.
Representatives for Altman at OpenAI did not respond to a request for comment from Business Insider.
Altman’s post comes just weeks after a massive sell-off in AI-linked stocks in January.
The sell-off was triggered by the runaway success of Chinese AI startup DeepSeek. DeepSeek’s high-performing but cheaper models raised concerns that demand for AI hardware like Nvidia’s chips may fall.
Meanwhile, tech giants like Amazon, Microsoft, Google, and Meta, are doubling down on the AI race. Executives from these companies said in recent earnings reports that they are ramping up their investments on AI.
The combined capital expenditures of the four companies are set to surpass $320 billion this year.
Last month, Altman was at the White House when President Donald Trump announced Stargate, a $500 billion AI infrastructure investment project. Stargate is a joint venture between OpenAI, SoftBank, Oracle, and Emirati investor MGX.
