The Price of Intelligence Is Falling Rapidly
Epoch AI finds a given AI performance level became about 47% cheaper per quarter, roughly 13-fold yearly.
An Epoch AI report by Emberson and Roodman, discussed by Marginal Revolution, finds the cost of a given level of AI performance fell about 47% per quarter over three years, roughly a 13-fold annual drop. OpenAI o3 cost about $0.30 per question to reach 75% on GPQA Diamond in January 2025, while GPT-5.6 Luna reached a similar score for about $0.0004 in mid-2026. That is roughly a 725-fold decline in under 18 months. The commentary argues frontier models are becoming both more capable and much cheaper to run at a fixed performance level.
- Epoch AI estimates a given AI performance level got about 47% cheaper each quarter.
- That pace is roughly a 13-fold cost drop every year.
- 75% on GPQA Diamond fell from about $0.30 with o3 to $0.0004 with GPT-5.6 Luna.
- The roughly 725-fold decline occurred in under 18 months.
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An amazing Epoch AI report from Emberson and Roodman:
- Over the past three years, the cost of a given level of AI performance has fallen an average of some 47% per quarter. That is a 13-fold drop every year – a faster rate than any other transformative technology in history.
To give an example, OpenAI o3 cost about $0.30/question to attain 75% on GPQA Diamond in January 2025, while GPT-5.6 Luna attained roughly the same score for $0.0004 in mid-2026—a roughly 725-fold decline in under 18 months.
Thus, it’s not just that the models are getting smarter. A given level of intelligence is also requiring dramatically less inference expenditure. This is one reason the open-model threat is not as large as it appears: frontier models don’t merely outperform older models; they are rapidly becoming cheaper to run at any given level of performance. Smarter and cheaper.
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