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Eisensteintoday at 10:08 AM2 repliesview on HN

> Inference costs scale linearly with usage. R&D expenses do not.

Do we know this is true for AI?


Replies

brooksttoday at 12:29 PM

It’s pretty much the definition of fixed costs versus variable costs.

You spend the same amount on R&D whether you have one hobbyist user or 90% market share.

sothatsittoday at 10:20 AM

Yes. R&D is guaranteed to fall as a percentage of costs eventually. The only question is when, and there is also a question of who is still solvent when that time comes. It is competition and an innovation race that keeps it so high, and it won't stay so high forever. Either rising revenues or falling competition will bring R&D costs down as a percentage of revenue at some point.

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