The market price of AI model token continues to decline. The token issued on Data tracked by LLM Token Expenditure Index fell to 97 cents on Monday, reaching the lowest level since the launch of the index and also showing a significant drop from this summer's high points.
This decline reflects an intensifying competition in the industry. Cheaper open-source models and price cuts by several leading laboratories are pulling down the market's pricing expectations for token.
Price decline compresses revenue
For model providers, a decline in token prices means that their revenue margins are squeezed, yet they still need to continue to invest in computing power. Syz Group Investment Director Charles - Henry Monchau pointed out that basic model laboratories are the most directly affected.
OpenAI At the end of July, the prices of two GPT-5.6 models were reduced. Monchau also mentioned that some laboratories have started to implement "dynamic pricing," allowing access rates to change with demand, which has further increased market pressure.
Competition shifts towards distribution capabilities.
Monchau believes that as the gap in capabilities between open-source and closed-source models narrows, the focus of competition is shifting from the "model itself" to distribution, memory, and contextual capabilities. In other words, the room for maintaining high prices solely based on model capabilities is narrowing.
This change has also prompted the market to re-evaluate the returns on the construction of AI. Both Anthropic and OpenAI secretly submitted IPO documents to regulatory authorities during the summer. The downward trend in token prices may make investors more cautious about their future profit prospects.
Tech stocks also fell in tandem.
AI Pricing pressures have also weighed on the performance of tech stocks. On Tuesday, the Nasdaq fell by nearly 1%, and the S&P 500 index declined by 0.4%. Giants such as NVIDIA and Microsoft have previously invested billions of dollars to expand AI capabilities, and market expectations for related returns are facing a re-pricing.
