Benedict Evans explores token pricing implications after supply crunch eases

The Neuron · 3 days ago

Benedict Evans examines how token prices will stabilize once the current semiconductor supply constraints ease, identifying supply, demand, marginal costs, and return-on-investment as unknowable variables. The current inference market operates at 40-50% gross margins, but training costs—which are substantially larger than revenue—remain unpriced into these figures. The outcome depends on four unresolved questions: how many use cases justify frontier model costs, whether frontier capabilities continue advancing faster than efficiency gains, whether competition among frontier models persists, and whether value concentrates in the models themselves or in applications built atop them.