IMHO, API prices are likely to drop over time as we scale up and efficiencies are found, combined with general pricing pressure from the competition... SOTA models will continue to have SOTA prices, of course, but reasonable priced distilled and open weights models are already common.

Some of this seems like wishful thinking to me.

"as we scale up" We already have large data centers, and, if anything, "scaling up" is just driving up expenses for debt and hardware. The real problem with AI, relative to the internet boom, is that the more you use it, the more expensive it is. The economies of scale to be taken advantage of are minimal.

I do think price of compute will come down, but exactly because people will be running their own open source models on their own hardware instead of Sam Altman to stack GPUs in a warehouse, but it will still be too expensive and inaccurate.

And we're still headed for a financial cliff in this scenario.