The AI cost collapse is changing what’s possible—with massive implications for tech startups

Recently I watched a startup demo where they were running 500 GPT-4 queries per user session. In 2023, that would have cost them $5 per user. Today it costs them less than 50 cents. And they're still complaining about API costs being too high.

When costs collapse, new worlds appear. This isn't just cost-cutting. It's a phase change.

Think about what happens when water turns to steam. At 99°C, you have hot water. At 100°C, you have an entirely different substance with different properties that can do different things.