What’s Driving AI Costs Down and What’s Driving Them Back Up

Developing large language models is expensive work: the costs of running LLMs in the cloud knocked out more than half of the revenue Anthropic generated last month, Maria Heeter and I reported yesterday. And that doesn’t include the cost to train its models in the first place.

Recent technological advancements should make it cheaper to develop and run LLMs, however. It’s not clear if the new savings will be enough to turn LLM developers into high-margin software businesses, but it …

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