"Need to create"

main ornament
November 10, 2024

How Much Will Intelligence Cost in the Future?

AI-driven intelligence costs are falling fast: token prices are dropping faster than nearly anything in tech.

We might see intelligence (compute, inference) become a renewable, fungible resource, fueled by inputs like hardware (GPUs, TPUs, ASICs), electricity, and the supply chains necessary for their creation and deployment.

But true commoditization isn’t guaranteed:

  1. If hardware remains scarce, prices will rise (though the opposite keeps happening)

  2. If someone develops next-level AI (e.g., GPT-6) that unlocks entirely new use cases and can charge a premium before competition catches up, scarcity will again drive prices higher. Especially if inference hardware is limited, creating a bidding war among those willing to pay. This hasn’t happened yet because current LLMs (like GPT-4) don’t deliver enough value to justify significantly higher prices. But if a GPT-6 were capable of matching or surpassing highly skilled individuals, you wouldn’t price it at $10 per million tokens. Instead, you’d charge as much as customers are willing to pay, based on the value it creates.

The result? Basic intelligence could drop to just energy and material costs, while the newest, high-value AI remains exclusive, commanding premium prices.

Long-term: Even premium AIs may eventually become commodities, with the frontier continuously advancing. This would grant everyone access to better and better intelligence, while those at the cutting edge push the boundaries even further.

*Intelligence = the ability to solve intellectual tasks (not just physical work). Here I focus only on inference, not training, because inference has the potential to scale infinitely, as demand will be infinite, unlike other resources (e.g., food, entertainment, goods), which are limited by our time and attention.

Leave a comment

Biography

I have always been driven by the need to create — games, AI agents, ideas. That’s why I started Keen Software House: to create games that only existed in my head. After Space Engineers took off, I founded GoodAI to develop AGI, to help humanity and understand the universe.

These days I’m focused on Space Engineers 2, the VRAGE3 engine, AI People, and autonomous agents in general — powering NPCs in our games, or swarms of autonomous and intelligent drones.

It’s all part of my long-term plan: to make civilization stronger, greater, and more resilient.

Our home base is a 17th-century Oranžérie in Prague — but we’re a remote-first, global team of 100+ programmers, artists, designers, and engineers.

I am proudly European , and in the last few years, I’ve come to love South Africa and its people.

Blog Archive

Subscribe to Newsletter

Sign up for emails and stay in touch. No more than once every 2 weeks, no sales, no spam.

Sign Up