LLM marginal cost will stay high even as token cost declines.

· Bits and Bobs 1/26/26
  • LLM marginal cost will stay high even as token cost declines.
    • That's because of Jevon's Paradox.
    • As the cost gets cheaper, we'll use them for even more things.
    • Anything that uses LLMs will have to contend with non-trivial marginal cost, for the foreseeable future.
    • Electricity is cheap and yet it's still metered.

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