Why is AI expensive? Understanding Tokens, GPUs, and Energy.
Traditional software runs on CPUs (Central Processing Units).
AI runs on GPUs (Graphics Processing Units).
These are the same chips used for video games, but much more powerful. A single high-end AI chip (like an NVIDIA H100) can cost as much as a luxury car ($30,000+).
To train a model like GPT-4, companies use thousands of these chips for months.