So: I buy that the cost of frontier performance is going up exponentially, but that doesn't mean there is a fundamental link. We also know that benchmark performance of much smaller/cheaper models has been increasing (as far as I know METR only looks at frontier models), so that makes me wonder if the exponential cost/time horizon relationship is only for the frontier models.
Difference is that the current prices have a lot of subsidies from OPM
Once the narrative changes to something more realistic, I can see prices increase across the board, I mean forget $200/month for codex pro, expect $1000/month or something similar.
So its a race between new supply of hardware with new paradigm shifts that can hit market vs tide going out in the financial markets.
128GB is all you need.
A few more generations of hardware and open models will find people pretty happy doing whatever they need to on their laptop locally with big SOTA models left for special purposes. There will be a pretty big bubble burst when there aren't enough customers for $1000/month per seat needed to sustain the enormous datacenter models.
Apple will win this battle and nvidia will be second when their goals shift to workstations instead of servers.
Measuring Claude 4.7's tokenizer costs - https://news.ycombinator.com/item?id=47807006 (309 comments)
Where the long-term payoff still seems speculative, is for companies doing training rather than just inference.