alt Hacker News> But inference costs are dropping dramatically over time, and that trend shows no signs of slowing. So even if a task costs $8 today thanks to VC subsidies, I can be reasonably confident that the same task will cost $8 or less without subsidies in the not-too-distant future.
I'd like to see this statement plotted against current trends in hardware prices ISO performance. Ram, for example, is not meaningfully better than it was 2 years ago, and yet is 3x the price.
I fail to see how costs can drop while valuations for all major hardware vendors continue to go up. I don't think the markets would price companies in this way if the thought all major hardware vendors were going to see margins shrink a la commodity like you've implied.
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> I fail to see how costs can drop while valuations for all major hardware vendors continue to go up. I don't think the markets would price companies in this way if the thought all major hardware vendors were going to see margins shrink a la commodity like you've implied.
This isn't hard to see. A company's overall profits are influenced – but not determined – by the per-unit economics. For example, increasing volume (quantity sold) at the same per-unit profit leads to more profits.
> I'd like to see this statement plotted against current trends in hardware prices ISO performance.
Prices for who? The prices that are being paid by the big movers in the AI space, for hardware, aren't sticker price and never were.
The example you use in your comment, RAM, won't work: It's not 3x the price for OpenAI, since they already bought it all.
> So even if a task costs $8 today thanks to VC subsidies, I can be reasonably confident that the same task will cost $8 or less without subsidies in the not-too-distant future.
The same task on the same LLM will cost $8 or less. But that's not what vendors will be selling, nor what users will be buying. They'll be buying the same task on a newer LLM. The results will be better, but the price will be higher than the same task on the original LLM.
It's not the hardware getting cheaper, it's that LLMs were developed when we really didn't understand how they worked, and there is still some room to improve the implementations, particularly do more with less RAM... And that's everything from doing more with fewer weights to things like FP16, not to mention if you can 2x the speed you can get twice as much done with the same RAM and all the other parts.
> I fail to see how costs can drop while valuations for all major hardware vendors continue to go up.
yeah. valuations for hardware vendors have nothing to do with costs. valuations are a meaningless thing to integrate into your thinking about something objective like, will the retail costs of inference trend down (obviously yes)
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I've seen the following quote.
"The energy consumed per text prompt for Gemini Apps has been reduced by 33x over the past 12 months."
My thinking is that if Google can give away LLM usage (which is obviously subsidized) it can't be astronomically expensive, in the realm of what we are paying for ChatGPT. Google has their own TPUs and company culture oriented towards optimizing the energy usage/hardware costs.
I tend to agree with the grandparent on this, LLMs will get cheaper for what we have now level intelligence, and will get more expensive for SOTA models.