Sam Altman Predicts AI Costs Will Drop Tenfold Annually
AI Will Become More Affordable Every Year, Says OpenAI CEO
The cost of using artificial intelligence is expected to decline significantly each year, according to OpenAI CEO Sam Altman. In a recent blog post, Altman stated that AI usage costs are decreasing by a factor of 10 every 12 months, making the technology more accessible and widely adopted.
Altman pointed to the dramatic reduction in costs between GPT-4 in early 2023 and GPT-4o in mid-2024, where the price per token dropped nearly 150 times. He compared this rapid decline to Moore’s Law, which historically predicted computing power would double every 18 months, calling AI’s progress "unbelievably stronger."
Massive AI Investment and Continuous Growth
This insight comes amid OpenAI’s ambitious AI infrastructure project, Stargate, a $500 billion initiative announced in January. Altman emphasized that as AI becomes cheaper, its use will grow exponentially.
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Beyond costs, Altman noted that AI intelligence is directly tied to the resources invested in its development. He highlighted that spending more money on AI research consistently yields predictable improvements in performance. With AI capabilities advancing at a “super-exponential” rate, he sees no reason for the current wave of investment to slow down in the near future.
“If these trends continue, the societal impact will be massive,” Altman wrote. He predicted that as AI technology becomes more affordable, the cost of many goods will plummet. However, he warned that luxury items and scarce resources, such as land, may see significant price increases.
AI Competition Heats Up Among Tech Giants
Altman’s comments come at a time when the AI industry is experiencing major shifts. In January, AI-linked stocks saw a sharp decline following the success of Chinese startup DeepSeek, whose cost-effective AI models raised concerns about demand for high-end AI hardware, such as Nvidia’s chips.
Despite this, leading tech companies, including Amazon, Microsoft, Google, and Meta, are intensifying their AI investments. Their combined capital expenditures are projected to exceed $320 billion this year, underscoring their commitment to AI development.
Last month, Altman was present at the White House when former President Donald Trump announced the Stargate initiative, a collaborative AI infrastructure project involving OpenAI, SoftBank, Oracle, and Emirati investor MGX.
As AI technology continues to evolve at an unprecedented pace, Altman’s predictions suggest that businesses and consumers alike can expect increasingly powerful AI tools at a fraction of today’s costs.
