👾 The Cost of AI: Breakdown of Investments in Training, Infrastructure and More

In recent years, artificial intelligence has not only achieved technological breakthroughs, but has also attracted massive financial investment. The development of powerful AI systems such as ChatGPT, Claude or Gemini has fundamentally changed the public perception of this technology. However, while the discussion often revolves around ethical issues, social impact or technical milestones, one key aspect is often ignored: the enormous costs associated with the development and operation of modern AI systems.

The financial dimensions of AI development are impressive. OpenAI is said to have spent more than 540 million dollars on training GPT-4 alone. Google has invested billions in its AI infrastructure. Anthropic has completed financing rounds worth billions of dollars, a significant proportion of which flows directly into the development and training of its AI models. xAI, on the other hand, has spent 3-4 billion dollars on the hardware for its supercluster alone. Not to mention Project Stargate, whose investment volume is estimated at $500B.

These figures raise important questions: Where exactly is the money going? Which cost factors dominate AI development? And what are the long-term economic implications for the industry, but also for companies and organizations that want to use AI technologies?
The working hypothesis of this article is therefore that the costs of AI development are distributed unevenly across various factors, with the training of models and the infrastructure required for this being the biggest cost drivers, while at the same time new business models are being developed to amortize these enormous investments.

The Cost Factor of Training: Why Teaching AI Models Costs Millions

Training modern AI models, especially large language models, is one of the biggest cost factors in the AI ecosystem This process requires not only enormous computing resources, but also specialized hardware, data and experts In principle, however, it can be assumed that more compute is spent and needed for inference than for training.

Overall, however, many AI companies remain silent when it comes to concrete figures. For example, we know from numerous reports what the training costs of GPT-4 were, but nothing about GPT-4.5 or the o-series. There are official figures about the inference costs of o3, for example, but nothing about how expensive the training of the reasoning model was.

Calculation Costs

The computational costs of training advanced AI models are remarkably high. Sam Altman, CEO of OpenAI, has publicly stated that the training of GPT-4 cost “more than 100 million dollars”. Other estimates go as high as 540 million dollars. In comparison, the training of GPT-3, the predecessor model, was estimated at around 4.6 million dollars - an increase of 20 to 100 times within a few years.

This exponential increase in costs follows a trend that AI researchers are observing: The computing power required to train state-of-the-art AI models doubles approximately every 3.4 months - a rate that is significantly faster than Moore's Law, which traditionally applies to computer hardware.

Concrete figures show the extent:

• GPT-4's training is estimated to have consumed 25,000 NVIDIA A100 GPUs over several months

• At current cloud prices of around 1-3 dollars per GPU hour for A100 GPUs, this equates to several hundred million dollars for GPU usage alone

• Anthropic's latest model Claude 3 took “tens of millions of dollars” to train, according to the company

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