Part 4/8:
The discussion of pricing also brings up an essential economic concept: demand elasticity. Hazen highlighted that while cheaper prices generally lead to increased demand, the exact relationship can vary. A critical question remains: if the cost of AI drops significantly, how much will its use increase? The elasticity of demand will ultimately determine how this dynamic plays out.
She further elaborated on the trend where the enhancement of technology, such as memory and CPU power, tends to create new opportunities for utilization. This suggests that while the market may initially experience volatility, an increase in uptake could follow as companies find innovative ways to integrate these cheaper and more powerful AI solutions.