# Epoch AI report finds AI costs drop 13x yearly, faster than Moore’s Law

Digest AI · Research · published 2026-09-30T12:40:00Z

Canonical: https://digestai.news/story/epoch-ai-report-finds-ai-costs-drop-13x-yearly-faster-than-moores-law

## Summary

A report from AI research firm Epoch AI suggests the price of AI has fallen by thousands of times in recent years, outpacing even Moore’s Law. The firm estimates costs drop **under 50% every quarter** and **13 times per year**, faster than lithium batteries or DNA sequencing. For example, OpenAI’s GPT-o3 cost **$0.30 per question** on a benchmark in 2025, while GPT-5.6 Luna scored the same result for **$0.0004 per question** in mid-2026—a **750x reduction** in cost for equivalent performance.

The report highlights uneven progress across tasks: math benchmarks saw stagnation until mid-2026, while chess puzzles improved steadily. Epoch AI notes declining cost-reduction rates—down from **66% per quarter** to **32%**—possibly due to rising energy and hardware costs. Critics warn of ‘benchmaxxing,’ where models are optimized for specific tests rather than real-world use. The findings raise questions for labs like OpenAI and Anthropic, as cheaper alternatives may erode loyalty and revenue models.

## Key points

- Epoch AI estimates AI costs drop **13x yearly**, faster than lithium batteries or DNA sequencing
- OpenAI’s GPT-5.6 Luna costs **$0.0004 per question** on a benchmark vs. **$0.30** for GPT-o3 in 2025
- Cost reductions slow to **32% per quarter** in 2026, possibly due to rising hardware/energy prices

## Why it matters

Falling AI costs threaten subscription models and third-party services, forcing labs to justify frontier development. Businesses may delay upgrades, waiting for cheaper alternatives, while open-weight models could disrupt incumbents.

## Sources

1. [The price of AI is crashing faster than the rate of Moore's Law, report suggests](https://tomshardware.com/tech-industry/artificial-intelligence/the-price-of-ai-is-crashing-faster-than-the-rate-of-moores-law-report-suggests-intelligence-costs-are-in-freefall-outpacing-comparative-technologies-like-compute-dna-sequencing-and-lithium-batteries) (Tom's Hardware, 2026-09-30)

Part of the developing story: [AI Wage Gap and Performance Surge](https://digestai.news/thread/study-links-ai-exposure-to-6-7-slower-real-wage-growth-for-us-workers) (3 stories)

## Cite

Digest AI, "Epoch AI report finds AI costs drop 13x yearly, faster than Moore’s Law", 30 September 2026, https://digestai.news/story/epoch-ai-report-finds-ai-costs-drop-13x-yearly-faster-than-moores-law

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