I'm a little skeptical of a full on 2008-style 'burst'. I imagine it'll be closer to a slow deflation as these companies need to turn a profit.

Fundamentally, serving a model via API is profitable (re: Dario, OpenAI), and inference costs come down drastically over time.

The main expense comes twofold: 1. The cost of train a new model is extremely expensive. GPUs / yolo runs / data

2. Newer models tend to churn through more tokens and be more expensive to serve in the beginning before optimizations are made.

(not including payrolls)

OpenAI and Anthropic can become money printers once they downgrade the Free tiers, add ads or other attention monetizing methods, and rely on a usage model once people and businesses become more and more integrated with LLMs, which are undoubtedly useful.