AI Engineering
Why Inference Costs Dropped 10x: The Economics Behind Cheaper LLMs
A breakdown of the hardware, serving-software, architecture, and market forces that drove down LLM inference costs, and what it means for how you should architect AI products.
Sachin SharmaCreator
Jun 30, 2026
7 min read
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A breakdown of the hardware, serving-software, architecture, and market forces that drove down LLM inference costs, and what it means for how you should architect AI products.
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Why Inference Costs Dropped 10x: The Economics Behind Cheaper LLMs
It's not one breakthrough. It's a stack of compounding wins — hardware, serving software, model architecture, and market competition — that quietly made frontier-adjacent intelligence absurdly cheap.