Ways to think about token pricing

Short summary

AI model labs currently enjoy a supply crunch that lets them name their price, but this essay questions what happens when supply catches up with demand. Evans frames the core tension around how price, capacity, capex, and demand will reach equilibrium once the crunch eases. The central question is whether model labs will inevitably become low-margin commodity infrastructure or retain pricing power.

• •AI is in a supply crunch today, allowing model labs to set prices freely
• •The essay explores how supply, demand, price, capacity, and capex will rebalance
• •Key question: will model labs become low-margin commodity infrastructure?

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