Can tech companies learn to love cheaper AI models?
The AI boom has been built on a basic assumption: bigger models are more powerful, and the most powerful models win. Now, the industry is about to learn what happens if that assumption starts to break.
Mounting costs have already pressured users to give smaller and cheaper models a second look. This cost-conscious model-shopping is new and it’s unclear how it will affect the industry, but the impact is likely to be significant.
One prediction, laid out best by Coinbase co-founder Brian Armstrong, is that it will result in the vast majority of tasks shifting to cheaper models.
“Demand for intelligence is near infinite, but 80% of workloads will be running on 99% cheaper models within 12-18 months,” Armstrong wrote on X. “20% of workloads will still run on latest gen models where IQ maxing is important.”
It’s hard to overstate what a significant shift it will be for...
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