TLDR Tech / Marketing
The Token Price Collapse And Why AI Costs Still Increase
Cheaper tokens didn't shrink AI bills — they multiplied how many calls get made. Token prices fell over 95% in three years, yet enterprise LLM spend more than doubled in 6 months to $8.4 billion. This volume surge impacts margins, as AI-native gross margins are 50-60% compared to 80-90% for traditional per-seat SaaS. A flat seat price cannot absorb usage-scaled costs, forcing a shift toward per-action and per-outcome pricing, a model adopted by Salesforce, Intercom, and GitHub Copilot.
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