As startups race to integrate AI into their products, they are running into a major roadblock: spiraling costs, caused by the immense computing power required to process AI queries.
CNBC reports on one startup, video game company Latitude, which found itself paying hundreds of thousands of dollars a month to process millions of AI requests from users: at least as much as its expenses for human employees.At its peak in 2021, Walton estimates Latitude was spending nearly $200,000 a month on OpenAI’s so-called generative AI software and Amazon Web Services in order to keep up with the millions of user queries it needed to process each day.
By the end of 2021, Latitude switched from using OpenAI’s GPT software to a cheaper but still capable language software offered by startup AI21 Labs, Walton said, adding that the startup also incorporated open source and free language models into its service to lower the cost. Latitude’s generative AI bills have dropped to under $100,000 a month, Walton said, and the startup charges players a monthly subscription for more advanced AI features to help reduce the cost.
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