DeepSeek success prompts Altman to promise much cheaper American AI

OpenAI CEO Sam Altman, still reeling about the fact that Chinese startup DeepSeek managed to build a much cheaper but just as powerful AI chatbot, now says that the cost of using AI will drop by 10 times each year.

In a new blog post, Altman predictably contemplates humanity’s bright future alongside artificial general intelligence (AGI), equaling this mysteriously defined term to inventions like electricity, the computer, and the internet.

“In a decade, perhaps everyone on earth will be capable of accomplishing more than the most impactful person can today,” writes Altman, typically demonstrating both confidence in whatever he’s doing and a lack of knowledge of how inequality and wealth concentration works around the planet.

However, the OpenAI CEO also speaks numbers – finally. Let’s hope he has credible information from his own company, of course, but Altman says that the cost of using AI will drop by 10 times every year.

“The cost to use a given level of AI falls about 10x every 12 months, and lower prices lead to much more use,”

Altman wrote.

“The cost to use a given level of AI falls about 10x every 12 months, and lower prices lead to much more use,” Altman wrote.

“You can see this in the token cost from GPT-4 in early 2023 to GPT-4o in mid-2024, where the price per token dropped about 150x in that time period. Moore's law changed the world at 2x every 18 months – this is unbelievably stronger.”

Because of this, Altman continues, the impacts on society should be significant. But change will not come immediately, he rushes to add: we will spend time in 2025 much as we did in 2024.

“But the future will be coming at us in a way that is impossible to ignore. <...> We will find new things to do, new ways to be useful to each other, and new ways to compete, but they may not look very much like the jobs of today,” says Altman.

“Anyone in 2035 should be able to marshall the intellectual capacity equivalent to everyone in 2025 – everyone should have access to unlimited genius to direct however they can imagine.”

The obvious caveat here is that Altman’s post comes just weeks after the global tech market was shaken by a massive sell-off in AI-linked stocks.

Of course, it was triggered by the success of Chinese AI startup DeepSeek. Its new AI chatbot is high-performing but much cheaper than most Western models.

Altman soon said OpenAI will make “better models.” Now, it looks like they will also be cheaper. Besides, Altman said on Reddit a week ago that OpenAI might make some or all of its models open-source.

Anyway, OpenAI is certainly flush with cash. The firm is in the midst of raising a potentially record-setting $40 billion funding round that would nearly double OpenAI’s valuation to as high as $300 billion.

Besides, US President Trump and Altman announced in late January a $500 billion private-sector investment called Stargate, a new joint venture between OpenAI, Oracle, and SoftBank to boost AI infrastructure in the US.

Altman is apparently on good terms with Trump. According to The New York Times, the young entrepreneur won the president over after telling him that the US tech industry would reach AGI during the Trump administration.