GPT3.5 is basically free now

OpenAI announced another price drop yesterday. See here.

The dramatic drop in prices of GPT3.5-level models is really interesting for hardware companies like rabbit inc., who is selling their prototype model for only $200.

The default assumption is that you need zero-marginal-cost inference for AI products you pay for once. But if the price drops continue, it might be possible to keep margins high enough while still doing inference in the cloud, given the lifetime of a hardware product.

At the current price point, $1 buys you about 500,000 words of output tokens. War and Peace is around 590,000 words.