Assuming AI doesn’t just flame out (which seems unlikely at this point) I think the author’s main point - that traffic always shifts to the expensive SOTA model when it’s released - may eventually slow down. Shifting from gpt 3.5 to 4 was necessary, because 3.5 was basically useless. The shift from 4 to 4.5 was less amazing, and from 4.5 to 5 will probably be meh, so aside from trying it out many people will probably be fine staying on the cheaper models - especially if the AI companies continue bifurcating them with ones for “research”, others for coding, others for creative, etc.
this post was submitted on 03 Aug 2025
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They were burning money to gain market share and now they're jacking up the price? Shocking, I say, truly shocking.
Is what I would've said if I didn't read the article, but it addresses that pretty well. The jist is VC went in with expectations of greatly decreasing costs, which is happening with older models, but nobody wants to use older models.
So, costs are actually going up, and the bubble will keep swelling, I guess.