AI & Tech
ChatGPT Cost Per Token Dropped 97% in Two Years From Version 4 to 5.4
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OpenAI CFO Sarah Friar on IPO, AI Rivalries, New Device, and Spending $100B+ on Compute
"From 4 to 5.4, the deprecation cost was 97%. That happened in like 2 years. That's incredible. Even our newest model, if you look at 5.5 that we just released, we actually raised prices on 5.5 2x. But if you look at what the cost to the customer is, they're probably still getting a break of about 20% to 30% cost reduction per token."
Friar disclosed that OpenAI achieved a 97% reduction in cost per token between ChatGPT-4 and version 5.4 over just two years, demonstrating massive deflationary pressure in AI compute economics. Despite doubling prices on the newest 5.5 model, customers still receive 20-30% cost reduction per token, suggesting OpenAI's margins are expanding rapidly while maintaining competitive pressure on rivals.
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