The LLM Token Expenditure Index, published by US information firm Silicon Data, dropped to $0.97 per million tokens on August 31, hitting an all-time low since its launch last year and down over 50% from May's peak of $2.05. The decline is driven by Chinese AI firm Moonshot AI's open-source model Kimi K3, OpenAI's July price cuts on its ChatGPT-5.6 series, and dynamic pricing policies from major vendors. Lower token costs benefit users but pressure revenue for OpenAI, Anthropic, and Google. Seez Group's investment head suggests foundational model companies shift focus to distribution, memory, and context capabilities to raise switching costs against open-source competition.
Yonhap News Agency reported that the LLM Token Expenditure Index, put together by US market intelligence firm Silicon Data, dropped to $0.97 per million tokens on August 31. That was the lowest reading since the index was created late last year. It also means the figure is down by more than 50% from the May high of $2.05.
Analysts tied the slide to a few things: the open-source model 'Kimi K3' released by Chinese AI company Moonshot AI, OpenAI's July price cuts for its ChatGPT-5.6 series, and dynamic pricing adopted by major vendors. Good for users, obviously. Lower token prices cut their costs. But they also squeeze revenue for model developers such as OpenAI, Anthropic, and Google.
The investment head of Seez Group said foundational model companies are taking the most direct hit. The recommendation: shift strategy and beef up distribution channels, memory, and context capabilities, so user switching costs rise and the threat from open-source models is harder to ignore.
This article was originally published by Bit.Fan. For more cryptocurrency news and market insights, visit www.bit.fan. Disclaimer:
The market information, project data, and third-party content displayed on this platform are for industry information sharing only and do not constitute any form of investment advice or return commitment.
Cryptocurrency trading carries high risks. Users should fully assess their risk tolerance and make independent decisions. All profits, losses, and legal responsibilities are borne by the users themselves.
