Soundtrack
This week, we welcome the Foo Fighters to the Macro Playlist (subscribe on Spotify)
The economic ideas driving markets.
Every week, Sébastien Mc Mahon and his team deliver their carefully selected economic analyses and market outlooks.
The week in review
This week, the new Fed Chair, Kevin Warsh, made a strong debut and is proposing a profound regime change
Download slidesChart of the week | Make AI Cheap Again
The cost of using AI models has moved down by about 15% over the last 2 weeks.
After a run-up earlier this year, token prices are rolling over. That’s not a bug, it’s the system working.
Corporate users are becoming more disciplined and cost conscious about how they deploy AI. At the same time, suppliers are racing to improve efficiency and lower costs.
Not every task needs a frontier model. For example, if you’re asking for simple information or using AI as a “life coach,” cheaper and lighter models do the job just fine. Most users will not care in the end which model solved their problem, so why pay a premium to have access to the cutting edge?
That’s where the real story is:
- Smarter allocation of compute
- Better model routing
- Falling marginal costs
Lower prices should support broader adoption. Broader adoption should lead to faster productivity gains. And the clearest path to that future goes through affordability.
Read our latest publications
Learn to fly: The AI productivity J curve and why the data are still idling on the runway
Read hereThis week, we welcome the Foo Fighters to the Macro Playlist (subscribe on Spotify)
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