Goldman Sachs Says AI Model Costs Matched 15 Years of PC Price Declines in About 3 Years
Summary
- Goldman Sachs said AI model costs fell from an initial 100 to the single digits in about 30 months.
- It said PC prices took about 15 years to fall to a similar level, highlighting a sharp difference in the speed of the declines.
- Goldman Sachs said it showed the decline in AI model costs by comparing PC prices during the 1980 ICT investment cycle with model prices during the 2022 AI investment cycle.
Forecast Trend Report by Period
Artificial intelligence model costs have fallen by an amount comparable to 15 years of declines in personal computer prices in roughly three years.
Data released by Goldman Sachs on October 9 showed the price index for large language models, or LLMs, dropped from an initial 100 to the single digits in about 30 months. By contrast, it took about 15 years for the PC price index to reach a similar level.
A price index adjusted for AI model performance also fell rapidly. The measure tracks cost changes after accounting for model performance, and it dropped from its starting level to near zero in about 30 months.
The analysis compared PC prices during the information and communications technology, or ICT, investment cycle that began in 1980 with model prices during the AI investment cycle that began in 2022.
The AI model price index was calculated based on March 2023, and Goldman Sachs used the comparison to show the pace of the decline in AI model costs relative to the earlier technology cycle.
JH Kim
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