Why Tech Giants Are Making AI Models 100x Smaller

James Brown has the answer: It’s a FAANG’s world (plus Microsoft!)

Facebook, Apple, Amazon, Nvidia, and Google. Can’t believe they left out Microsoft

OpenAI has released GPT-4o mini (a smaller version of GPT-4o).

Two immediate takeaways:

• One, GPT-4o is the best small model in the world, surpassing Anthropic’s Claude 3 Haiku and Google’s Gemini Flash, and even GPT-4, which is 100x larger, in some benchmarks.¹

• Two, GPT-4o mini is tiny, which means fast, which means cheap: “It is priced at 15 cents per million input tokens [∼2500 book pages] and 60 cents per million output tokens.”

OpenAI takes back the crown of cost-efficient AI.

Those are the facts. Here’s the big picture of the current trend—making AI models (up to) 100x smaller instead of larger:

• The first AI models were seriously underoptimized. It was a matter of time before they got tiny, fast, and cheap without compromising quality. In other words, they should’ve never been that expensive.

• A few companies own the best models—private, open-source, large, and now also tiny—which means they control the entire market.

• A few companies own the distribution channels, which means AI isn’t a democratization force but a new element of the same oligopoly.

This story reveals the real shape of the AI industry.