Cost Of AI inference September 2024

The artificial intelligence (AI) market is experiencing rapid evolution, with pricing structures playing a crucial role in shaping the industry’s future. Based on recent data from major AI providers, several key trends and potential future developments are emerging.

Current Pricing Landscape

1. 1. Tiered Pricing: Companies like OpenAI and Anthropic offer multiple tiers of models, with more advanced models commanding higher prices. For instance, GPT-4 is priced significantly higher than GPT-3.5 Turbo, reflecting its enhanced capabilities.

1. 1. Input/Output Differentiation: Most providers charge different rates for input and output tokens, with output generally being more expensive. This pricing model encourages efficient prompting and rewards models that can generate concise, high-quality responses.

1. 1. Wide Price Range: There’s a substantial price difference between the most and least expensive options. For example, Amazon’s Titan Text – Lite costs just $0.0003 per 1K input tokens, while Anthropic’s Claude 3 Opus charges $0.015 for the same volume – a 50x difference.

1. 1. Free Options: Some companies, like Mistral, offer free tiers for certain models, likely as a strategy to gain market share and encourage adoption.

Emerging AI Trends and Future Outlook

1. 1. Price Compression: As technology improves and competition intensifies, we may see a general downward trend in prices, particularly for less advanced models. This could make AI more accessible to a broader range of users and applications.

1. 1. Performance-Based Pricing: Future pricing models might more closely align with actual model performance rather than just computational resources. This could lead to more nuanced pricing tiers based on specific capabilities or use cases.

1. 1. Specialized Model Pricing: As the market matures, we might see more specialized models with tailored pricing for specific industries or tasks, rather than general-purpose models with uniform pricing.

1. 1. Subscription Models: To ensure steady revenue and encourage consistent usage, more providers might offer subscription-based pricing in addition to or instead of per-token pricing.

1. 1. Dynamic Pricing: Implementing real-time pricing adjustments based on demand and computational resources could become more common, similar to cloud computing pricing models.

1. 1. Bundled Services: AI providers might start offering packaged deals that include not just model access but also additional services like fine-tuning, data processing, or integration support.

1. 1. Open-Source Impact: The continued development of powerful open-source models could put pressure on commercial providers to justify their pricing through superior performance or additional features.

As the AI landscape continues to evolve, pricing strategies will play a pivotal role in shaping market dynamics, driving innovation, and determining the accessibility of AI technologies across various sectors and applications.

AI Inference Pricing from various providers

Provider	Model	Input Price (per 1K tokens)	Output Price (per 1K tokens)
Amazon Bedrock	Titan Text – Lite	$0.0003	$0.0004
Amazon Bedrock	Titan Text – Express	$0.0013	$0.0017
Amazon Bedrock	Claude Instant	$0.00163	$0.00551
Amazon Bedrock	Claude 3 Sonnet	$0.003	$0.015
Amazon Bedrock	Claude 3 Opus	$0.015	$0.075
Groq	Llama 3.1 70B Versatile 128k	$0.00059	$0.00079
Groq	Llama 3.1 8B Instant 128k	$0.00005	$0.00008
OpenAI	GPT-4 8k	$0.03	$0.06
OpenAI	GPT-4 32k	$0.06	$0.12
OpenAI	GPT-4 Turbo (128k)	$0.01	$0.03
OpenAI	GPT-3.5 Turbo	$0.0015	$0.002
Anthropic	Claude 2	$0.01102	$0.03268
Anthropic	Claude 3	$0.015	$0.075
Anthropic	Claude 3.5	$0.003	$0.015
Mistral	Mistral 7B	Free	Free
Mistral	Mistral Mix	Free	Free