280x Cheaper in Two Years: The AI Economy Has Flipped
9 min read
In 2023, a single query to GPT-4 cost enough that you had to count carefully. In 2025, the equivalent query became 280 times cheaper. Not 280 percent – 280 times. In two years, the cost of using AI went from a barrier to a rounding error.
Stanford AI Index – the annual report that compiles data on the AI industry from hundreds of sources – flagged this collapse in its 2025 edition. The 2026 report added context: AI investment exploded to $285.9bn, consumers are extracting $172bn of value a year, and data centres are eating electricity at the scale of New York State. The economy flipped – just not the way most people expected.
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