AI for Proposals, New Models and Features, the AI Cost Frontier
Leverage—April 7, 2025
Happy Spring and welcome to Q2 of 2025. Let’s dive right in!
News I’m Following
The pace of news in AI continues to be blistering, with new releases and announcements from the major players on a daily basis. Here are some that caught my eye over the last couple of weeks:
Microsoft has added agentic features to Copilot, such as being able to take actions on your behalf at sites like 1-800-Flowers.com and OpenTable.
AI labs have released or announced several new models, including:
OpenAI released a significant upgrade to ChatGPT’s image generation capabilities
Perplexity continues its momentum, shipping a bunch of new updates and features including improved source-checking and a simplified UI where the AI dynamically chooses the appropriate model for the task (ChatGPT could take a cue).
How I’m Getting Leverage
One of the most useful applications of AI tools for me has been in processing RFPs and developing proposals.
Writing proposals is a big part of my professional services business. Whether the RFP comes in the form of brief email or phone call, or a detailed formal document, we spend a lot of time reviewing, evaluating, and responding to these requests.
Responding to RFPs are what we call “non-billable” time—in other words it’s a cost of doing business rather than an activity that directly generates revenue.
Since launching my firm 7 years ago I’ve strived to compress the time spent on proposals to a minimum, looking for efficiencies that previous firms I’d worked for had missed.
Recently this has included using AI tools, primarily Claude Sonnet and its Artifacts feature, to cut down on non-billable legwork. It’s been great for:
summarizing the RFP and its key points
making lists of essential requirements to be included in an RFP response
helping to evaluate go/no-go decisions
drafting proposal language consistent with our standards
…and I know I am just scratching the surface here. Listening to a recent KP Reddy podcast on this topic I gathered several more ideas, like using AI to check a proposal draft against the RFP and identify any potential shortcomings.
The podcast also includes references to a couple of purpose-built tools for AI-powered proposal workflows like Joist AI and WorkOrb. I haven’t tried these but will report back if I do.
Trend I’m Watching
A lost of the focus on AI is at the bleeding edge, where companies are spending billions of dollars to buy and operate the latest hardware. Those top line numbers get a lot of attention.
What’s more interesting, though, is the pace at which the cost of any given level of performance is dropping like a rock.
In this chart from Ethan Mollick you can see that for comparable performance at the “cost frontier” (i.e. the most cost-efficient models) the cost has decreased 99.7% in less than two years.
Relatively few people can afford or justify the cost for access to top-end AI models. But as the cost to use AI tools that seemed like magic just a couple of years ago trends towards zero, the democratization of access to those capabilities is fascinating.
Could the cost frontier could end up being more impactful than the performance frontier?