causal claim
When H100 compute costs $20 per hour, a weaker, less efficient model wastes money by using more tokens to achieve the same result.
Dwarkesh Patel · Why smarter AI models could drive up compute prices 10x · 3 Aug 2026
In their words
The transcript segments this claim was taken from
“This is the Alkin-Allen effect in economics,”
“and what it's basically saying is that if it costs $20 an hour to rent an H100,”
“then it would be extremely stupid to use a weaker,”
“less efficient model because it's going to burn more tokens on your expensive compute to get the exact same result.”Play from 5:49Report a misattribution
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