AI BriefingThe rapid drop in AI prices is a software story, not a hardware one
Key point
The sharp decline in AI inference costs is being driven by software, and local open models are quickly catching up to frontier model performance.
Details
AI inference costs are plunging 70-90% every year. This is called LLMflation, and the key driver of the cost decline lies not in hardware advances but in software optimization.
Recently, open-weight models like Qwen 3.6 27B run smoothly even on a 4-year-old consumer GPU, the Nvidia RTX 3090 Ti. This model shows performance on par with Anthropic's Claude Sonnet.
In actual tests, Qwen 3.6 27B recorded performance similar to or even better than the paid cloud API Sonnet on tasks such as daily briefing summaries and paper evaluations. This means open-weight models have reached a level where they can replace frontier models in everyday usage settings.
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