Epoch AI estimates the cost of achieving a fixed AI capability level has fallen roughly 47 percent per quarter—about thirteenfold per year—since 2023, with declines steepest immediately after a capability becomes state-of-the-art. Drawing on this and gateway traffic data, the essay argues AI is not hitting a capability ceiling; instead, commoditized open-weight models are absorbing high-volume workloads while frontier labs retain reliability-sensitive tasks, shifting competition toward control of infrastructure layers such as compute, distribution, and governance.
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