If you know anything about tech, you will know that tech as an industry is highly deflationary--billionares use the same iPhones as you do! (in contrast, they don't drive the same cars you do)

This boils down to the fact that chip fabs have massive fixed costs and near-zero marginal costs, and these chips power all of tech. So the more chips they can produce for a given fab, the more profit they can make, meaning that companies are incentivized to sell as many products as possible for as low a price as possible.

We're supply constrained in the short-term because demand for these AI tools is so high that TSMC and other chip manufacturers can't keep up. But long term, supply/demand will equalize and tech will continue its deflationary trend. Sure, the frontier will always require the best possible chips, but AI coding is highly competitive, and competition drives price decreases. So prices may stay high right now, but it seems unlikely to me that this will stay true long-term.

All four of the author's steelmanned arguments at the end for a price decrease seem likely to come true already: competition is intense (OAI brags about how much cheaper they are compared to Claude), OAI subsidizes open-source influencers already, companies' earnings calls all call for more investment in fabs, and we're already close to saturating all of the benchmarks used for RL!

> billionares use the same iPhones as you do!

Not if they have the brain disease which makes this kind of thing appealing:

https://caviar.global/catalog/custom-iphone/iphone-17/?sort=...

Yes that flagship model incorporates an actual Rolex Daytona in solid gold.

> This boils down to the fact that chip fabs have massive fixed costs and near-zero marginal costs, and these chips power all of tech.

But what powers the chips?

You're talking about chip economics. Inference economics requires electricity dynamics.

> competition drives price decreases

This is something that is often cited as trueism, but there is no natural laws which makes this a necessary true. There is plenty of room for black swans in market laws. So much so that the term black swan is probably better known in the field of economy then any other field.

Competition may drive down the price of LLMs, however there is a greater then zero probability that it won‘t, and if it won’t, your whole counter-argument falls apart.