AI bills are exploding despite costs dropping 10x every 18 months because every saving gets reinvested into more usage.
BUT:
- Today's prices are subsidized (OpenAI losing $14B in 2026, Anthropic burning $12B in one quarter, Cursor alleges that a $200/month Claude Code subscription could cost up to $5,000 in compute.)
- When subsidies end, prices reverse into a 10x larger consumption base
- That's the double squeeze nobody is modeling for
Companies building token efficiency now won't feel it. The rest will.
And Altman? Cheaper AI to run = more use cases justified = bigger market for frontier models.
BUT: - Today's prices are subsidized (OpenAI losing $14B in 2026, Anthropic burning $12B in one quarter, Cursor alleges that a $200/month Claude Code subscription could cost up to $5,000 in compute.) - When subsidies end, prices reverse into a 10x larger consumption base - That's the double squeeze nobody is modeling for Companies building token efficiency now won't feel it. The rest will.
And Altman? Cheaper AI to run = more use cases justified = bigger market for frontier models.