Why assume token costs will increase as opposed to become commoditized?
I truly believe the cost per token for most people will eventually go approximately to zero even in the absence of subsidy unless there is a dramatic state intervention to curtail free computing and hardware R&D and manufacturing.
Your premise of full token commoditization has a major wrinkle though. GPU-centric data centers with never allow tokens to go to zero since you have a 1.5 year technical deprecation and 5 year life on the GPUs. Maybe Cerebras or similar chip builders, after writing model weights to silicon, will improve those returns on capital and enabling the scaling you are envisioning.
From my perch, AI at the edge is severely underserved, and the GTM for the hyperscalers mostly ignore it. So if someone figures out how to scale AI at the edge (nvidia + HF perhaps) then I think your premise is on point.
People in this thread are discussing it as if it is a question of pure economics. It's not! It's a question of "how much do we think we can get away with charging"
LLMs have no lock in. Switching costs are zero. It's really not clear that instant will ever come
1) "AI companies will go bust because tokens will cost too much" >> 2) "Don't let them build data centers that will sit empty" >> 3) Demand outstrips supply by a lot >> 4) Token costs too much.
This is no different from the NIMBY's that block all the housing then sit in a huff saying "see! everyone's leaving. good thing we didn't build anything!" when the rents go up.
It's how the cycle would go, and in the end the same people will complain about how AI "is only for rich people" (how high token prices will express itself in populist language)
The exact thing happened to housing.
I don't care what their dream is, I care about what's happening IRL. Please read the original article again, AI is clearly being used by workers to expand their productivity (and their earning capacity). The main thing that will screw that up is if token prices spike.
"AI is only for rich people, but this won't be due to token prices"
Statement doesn't make sense. Higher prices means unaffordability. I don't know why that would change for AI tokens. Higher token prices is what will make sure advanced models are only available to capital owners
This feels "unintuitive" only because it's not the dominant narrative, but that's not a measure of accuracy. "Everybody believe so" is not a good defense.