Why am I digging into this? My job is to design massively scalable server infrastructures that run cost effectively. If the underlying cost structures change because big data forces it down our throats I need to know about it way ahead of time.

On the flip side of that, if there are ways to game the system for major cost savings while the big guys compete on price I want to be all over that so my clients reap the benefits.

I talked briefly about this before as it pertains to IDEs and the cost of compute resources dropping for generative AI models but lets dig on in.

This whole concept of models requiring less GPUs and compute resources supports my theory that the big tech companies are all in a race to the bottom price wise, similar to what we saw with bigscreen TV prices from the 90s up to the present.

It makes you wonder what other ways they will find to monetize and differentiate themselves from each other.

What they need is ecosystem dependence to build a moat around their product. Apple is the most masterful at this when it comes to consumer electronics with the iPhone that works seamlessly with your Apple watch, iPad, and Mac Book.

When people still paid for SSL certs AWS giving away free SSL certs that only worked with AWS services was a great way to get people in the door.

So what is going to be what differentiates one big AI provider from the next? Where can they make their margins?

Regulation? Possibly, but right now this is the wild wild west. Also that could backfire massively. Addon products? Likely. It seems like they are all trying to get their “ecosystem” established right now.

Honestly I don’t have a crystal ball that tells me what they will do next but I am sure enjoying watching it unfold.

Lets take a second and look at the factors that could make prices go up.

Chip shortages caused by geopolitical turmoil.

Increases in energy costs would also make running GPUs/TPUs a lot more expensive.

I am sure there are other potential factors but those two are top of mind.

Bottom line on a long enough timeline, assuming humans don’t figure out a way to make themselves extinct, I have a feeling we will continue to see the price trend in a way favorable for the consumer.

If you disagree let me know why.