7 Aug 2026

AI TOKEN COSTS ARE DOWN 40% FROM THEIR MAY PEAK.

The main reason? Chinese AI models are dramatically cheaper. DeepSeek, Qwen and Kimi are delivering increasingly competitive performance at 10–35x lower token prices than many U.S. alternatives — and already account for as much as 46% of usage in some enterprise segments. The pressure is spreading. OpenAI, Google and Anthropic have responded by cutting prices by as much as 80%. This creates an interesting dynamic: Cheaper inference → more AI adoption → more token consumption → more demand for compute. But at the same time, it is compressing margins and commoditizing the intelligence layer. The likely long-term winners could therefore be the hyperscalers and infrastructure providers: even if the price per token collapses, exploding volumes can more than compensate. AI intelligence may become a commodity. AI compute may not. And markets still seem far from fully pricing that shift. Source: Austral Research, zerohedge

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