AI inference cost drops 47% per quarter, faster than any tech in history

The Price of Intelligence Is Falling Rapidly

An Epoch AI report finds that the inference cost for a given AI performance level has fallen 47% per quarter over three years—a 13x annual drop. OpenAI o3 cost $0.30 per GPQA Diamond question in Jan 2025; GPT-5.6 Luna hit the same score for $0.0004 by mid-2026, a ~725x decline in 18 months. Tabarrok argues frontier models are getting both smarter and cheaper to run, which partly offsets the open-model threat. The post doesn't show open-model cost curves, so take that claim with a grain of salt.

Why it matters: Epoch AI's inference cost decline curve is a widely cited data point right now, and Tabarrok adds an economics lens. Not pushed to 85+ because this is commentary on an existing report rather than a primary release, and the body excerpt cuts off before the full argument.