WorkJuly 9, 2026via Benedict Evans
Ways to think about token pricing
Why it matters
As AI supply constraints ease, token pricing will face structural pressure toward commoditization. This strategic analysis explores the economic equilibrium question that will reshape model lab business models and investor valuations.
Key signals
- Current supply crunch allows model labs to maintain high pricing power
- Long-term question: will token pricing collapse to commodity margins as supply normalizes
- Key variables: supply, demand, price, capacity utilization, and capex requirements
- Structural economics of model infrastructure vs. software moats
- Author: Benedict Evans (influential tech strategist)
The hook
AI pricing is about to enter a new era. Here's why today's margin goldmine won't last.
AI is in a supply crunch today, but what happens when we come out of it?
How and where will supply, demand, price, capacity and capex get back into
equilibrium? Today, model labs can name their price, but why won’t they end
up as low-margin commodity infrastructure?