Why Cheaper AI Could Mean More of It, Not Less
Making a powerful technology cheaper does not always shrink demand for it. Often it does the opposite, and that pattern is worth keeping in mind as the cost of running AI falls. Most coverage of artificial intelligence focuses on what the technology can do. The figure I keep coming back to is a quieter one: what it costs to run. That number, more than any single capability, will shape how far AI spreads and how much it ultimately changes the economy. The number behind the question There are estimates suggesting that the cost of processing for a model with one trillion parameters could fall by roughly 90 percent by 2030. That is not a modest discount. It is the price of a powerful capability dropping to a tenth of what it is today. The instinct, when a price falls like that, is to assume spending on it falls too. Cheaper AI, lower AI bills, end of story. But that instinct is usually wrong, and the reason has a name. Efficiency does not lead to thrift It is called the Jevons paradox: im...