Can the AI Boom Survive a Margin Squeeze?
TL;DR
In this episode of Merryn Talks Money, Merryn Somerset Webb and Steve Hou, head of research at Silicon Data, look at an emerging problem in AI economics: token prices are falling while the cost of the compute needed to produce them is rising. They discuss what this mismatch could mean for the valuations of companies like OpenAI and Anthropic, whether demand can justify the enormous sums invested in AI infrastructure, and what happens when everyone has armies of AI agents working on their behalf.
Nauti's Take
Falling token prices are a clear advantage for users because AI applications get cheaper. The risk sits with providers: if compute costs keep rising, margins and valuations at OpenAI or Anthropic come under pressure.
Anyone building products on these APIs should plan for price changes and test several models.
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