Sam Altman publishes "Three Observations" on the economics of AI
On Feb 9, 2025 Sam Altman published "Three Observations". He argues that (1) a model's intelligence roughly equals the log of the resources used to train and run it, (2) the cost of using a given level of AI falls about 10x every 12 months, and (3) the socioeconomic value of linearly increasing intelligence is super-exponential. He concludes that systems that 'start to point to AGI' are coming into view and that agents will become virtual co-workers.
Key facts
- Published Feb 9, 2025 on blog.samaltman.com; announced on X the same day
- Observation 1: intelligence ≈ log(resources: training compute, data, inference compute)
- Observation 2: cost of a given level of AI falls ~10x every 12 months (e.g. ~150x per-token price drop from GPT-4 early 2023 to GPT-4o mid-2024)
- Observation 3: socioeconomic value of linearly increasing intelligence is super-exponential
- Envisions that by 2035 anyone could marshal the intellectual capacity of everyone in 2025
What happened
Altman set out a compact economic model of AI progress that explains the lab's huge infrastructure bets.
Why it matters
It became a frequently cited framing for AI cost curves and investment logic in 2025–2026.
Changelog
- 2026-09-29: created (important-essays backfill; primary source checked)
Related posts (1)
- Sam Altman Sam Altman @sama · x · 2025-02-09
Cited as a source by: 2025-02-09-altman-three-observations
Related events
- Sam Altman publishes "The Intelligence Age": superintelligence possibly 'in a few thousand days' ★★★
- Sam Altman publishes "The Gentle Singularity": 'We are past the event horizon; the takeoff has started' ★★★★
Sources (2)
id: 2025-02-09-altman-three-observations · updated 2026-09-29 · open in the interactive timeline