The price of AI is falling faster than Moore's Law.

Judge as of January 2026. Moore's Law is taken as a halving of cost per unit of compute about every two years (roughly 30 to 40% a year). True: analyses (e.g. Epoch AI, a16z's 'LLMflation', Artificial Analysis pricing data) show the price of AI inference for a fixed capability level falling much faster than that, e.g. by 10x or more a year. Mostly true: prices fell faster than Moore's Law on the common capability-adjusted measure, but not on every measure (e.g. not for frontier-model list prices). Mixed: the result depends heavily on the metric chosen, with roughly equal support for and against. Mostly false: only narrow cases fell faster, while typical AI prices fell at or below the Moore's Law pace. False: AI prices were not falling, or fell more slowly than Moore's Law.

Set before the research began.

1. E1 The plunging price of thought Epoch AI · 22 September 2026

   “The cost of achieving a given level of AI performance has fallen about 47% per quarter since 2023, or 13× per year.”

2. E2 LLM inference prices have fallen rapidly but unequally across tasks Epoch AI · 12 March 2025

   “Across all of these benchmarks and performance thresholds, we found prices declining between 9x per year and 900x per year, with a median of 50x per year.”

3. E3 Welcome to LLMflation - LLM inference cost is going down fast ⬇️ | Andreessen Horowitz Andreessen Horowitz · 12 November 2024 Own record

   “For an LLM of equivalent performance, the cost is decreasing by 10x every year.”

4. E4 Tiered Super-Moore’s Law: Price Evolution, Production Frontiers, and Market Competition in Large Language Model Inference Services arXiv

   “Economy-tier models exhibit a price half-life of 1.10 years and mid-tier models 1.55 years—both significantly faster than Moore’s Law’s two-year benchmark”

Two independent Epoch AI analyses find that the price of reaching a fixed level of AI performance fell much faster than Moore's Law's pace of halving every two years. E1 puts the decline at about 13x per year since 2023, and E2 finds declines of 9x to 900x per year across benchmarks, with a median of 50x. a16z's own estimate of 10x per year (E3) agrees, but it comes from Andreessen's firm, so it is not independent. E4 finds that economy-tier and mid-tier model prices fell faster than Moore's Law, with price half-lives of 1.10 and 1.55 years; its quoted finding does not address flagship models. The evidence covers capability-adjusted prices and economy- and mid-tier models, and on those measures prices fell faster than Moore's Law; it does not cover every measure, such as frontier-model list prices, and the verdict stays at mostly true.