AI Performance Costs Fall 47% Each Quarter Since 2023

Since 2023, the cost of reaching a fixed level of artificial intelligence performance has fallen about 47% each quarter, potentially changing the economics of developing and using AI.

That pace amounts to a 13-fold reduction in cost over a year. The decline has outpaced cost reductions for DNA sequencing, computing and lithium batteries during their respective innovation periods.

Falling costs might make artificial general intelligence more feasible if improvements continue, but substantial increases in computing power and sustained cost reductions are still needed.

Businesses also need substantial productivity gains, improved efficiency or new products to justify rising spending on AI.