LLM Token Expenditure Index Falls Below $1, Down Over 50% From Summer Peak

churchkey · x · 2026-09-04

The LLM Token Expenditure Index, tracking market prices companies pay for AI model output, has fallen to $0.97 — its lowest since the index launched late last year and more than 50% below its summer peak.

• Drivers: cheaper models, open-source Chinese competitors, and falling inference costs commoditizing AI
• Great for users, but it erodes model providers' revenue and pricing power while massive compute commitments stay fixed
• The core concern: returns on hundreds of billions in AI infrastructure spending depend on demand generating enough revenue, not just existing

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