Trend Tuesday: AI prices are decreasing.

Art by @basilonmypizza: https://lnkd.in/eF8FkWzN - https://basilhefti.ch/

The headlines report the opposite: companies getting surprise bills and eating up their budget in a fraction of the year. This sets the tone for panic.

As always with multi-perspectivity, both statements are true at the same time.

Yes, new capabilities are sold at a premium price. And yes, commodity token prices fall rapidly - faster than other products so far (10x per year as a rule of thumb).

In other words: if GPT-4 tokens work for your case, you can get them cheaper than ever.

This reminds me of the sneakers I wanted as a kid. As they were out of my budget range, I needed to settle for less fancy - but still working - shoes.

If you pay high prices, this is because you crave the best tokens. But often, a less shiny product works just as well.

In fact, it pays to decide on a per-request level what capability - and price - matches the task best.

Also, you probably soon will start using more than one token provider.

This opens up a portfolio strategy. As with energy or network bandwidth, companies start to leverage multi-provider contracts.

What measures have taken to hedge AI prices?