The cost of AI model inputs has dramatically decreased, with GPT-3.5 level performance dropping to $0.07 per million tokens, while hardware costs and efficiency improve annually. This deflation in AI as an input cost, coupled with AI's new capabilities in reasoning and creation, is fundamentally reshaping the startup landscape. Y Combinator has observed a significant increase in AI-generated code, with some batches having nearly 95% of their codebase created by AI, leading to unprecedented growth rates. AI
IMPACT AI's collapsing input costs and expanding capabilities are explosively expanding the frontier of viable startups.
RANK_REASON Article discusses broad industry trends and their impact on startups, rather than a specific event.
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