Why current LLM costs are not sustainable

Multiple companies are facing unsustainable AI costs, with frontier models like GPT 5.5 commanding premium prices despite plateauing performance improvements. The author argues that prices will inevitably decline due to open-weight models becoming competitive, specialized chip improvements, lack of vendor lock-in, and diminishing returns on model performance gains. As these factors converge, AI labs will struggle to justify current pricing and prices will likely crash due to increased competition.