AI Token Prices Plunge to Record Low of 97 Cents, Intensifying Pressure on OpenAI and Anthropic

AI token prices are hitting new record lows

* A closely followed measure of artificial intelligence token prices touched fresh lows as the competitive landscape heats up and costs slide. * A sharp slide in prices can mean AI model users will need to shell out less, but can reduce pricing power for providers. In this article * NVDA * .IXIC * .SPX Follow your favorite stocksCREATE FREE ACCOUNT Boy Wirat | Istock | Getty Images A closely followed measure of artificial intelligence token prices touched fresh lows this week, the latest sign of deflating prices in an increasingly competitive landscape. The LLM Token Expenditure Index, a key gauge of daily prices from intelligence firm Silicon Data, fell to 97 cents on Monday. That marked the index's lowest reading since its creation late last year and has more than halved from the high recorded earlier this summer. Silicon Data's index tracks the going rate on the market for a large-language model token. A sharp slide in prices can mean AI model users will need to shell out less to run inquiries on popular chatbots like OpenAI's ChatGPT, Anthropic's Claude or Google's Gemini. But it can be bad news for the companies behind the models. A lower index price can condition consumers to expect lower rates for access to these offerings, resulting in less pricing power for providers. The recent drop is driven in part by the rise of open-source Chinese models like Moonshot's Kimi K3 that can fetch lower prices than alternatives from leading frontier lab, according to a Tuesday post from Charles-Henry Monchau, investing chief at Syz Group. OpenAI announced price cuts two of its GPT-5.6 AI models in late July, while Monchau said other frontier labs have rolled out offerings with "dynamic pricing" capabilities that can allow access rates to rise and fall with demand. These developments put more downward pressure on the market rate for tokens. "Foundation model labs are the most directly exposed," Monchau wrote. "Token deflation compresses the revenue line while compute commitments stay fixed. The strategic response is visible: the moat must shift away from raw model capability -- where the open-weight gap is now measured in months -- toward distribution, memory and context." Decreasing costs across the industry for producing a token have also led to lower prices in the index, Monchau said. The LLM Token Expenditure Index's slide could put new profit pressures on AI leaders like Anthropic and OpenAI as they contemplate when and if to enter the public market. Both companies confidentially filed for initial public offerings with regulators this summer. Investors may also need to rejigger their outlooks around the potential return on invested capital in the AI buildout as token prices slide. Megacap technology companies including Nvidia and Microsoft have poured billions of dollars into plans to expand their capabilities to power AI. Technology stocks led the broader market down on Tuesday. The technology-heavy Nasdaq Composite slid nearly 1%, while the broader S&P 500 ticked down 0.4%. -- CNBC's Nick Robertson contributed to this report. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

AI token prices hit record low, pressuring OpenAI and Anthropic

A key market benchmark fell to 97 cents per million tokens on Monday, less than half its peak from earlier this summer A widely watched benchmark for artificial intelligence token prices crossed below $1 for the first time on Monday, arriving at a threshold that analysts say puts meaningful pressure on the business models of top AI companies. The LLM Token Expenditure Index -- Silicon Data's flagship measure of daily token pricing, listed on Bloomberg under the ticker SDLLMTK -- fell to 97 cents per million tokens on Monday, a reading that undercuts every prior close since the index's debut late last year and sits at less than half the peak it set earlier this summer, according to CNBC. Silicon Data's index measures the usage-weighted effective price of a million large-language-model tokens across a defined universe of models, blending provider pricing with real consumption volumes observed across multi-provider routing gateways. The index had declined 8.6% over the prior seven days as of Monday. Several forces are driving the index lower, according to CNBC. The rise of lower-cost open-source Chinese models -- such as Moonshot's Kimi K3 -- has pulled down market rates, and OpenAI cut prices on two of its GPT-5.6 models in late July. Other frontier labs have also introduced dynamic pricing structures that allow access rates to move with demand, adding further downward pressure. Falling costs to produce tokens have also contributed to the index's decline. The drop puts particular pressure on frontier model companies. "Foundation model labs are the most directly exposed," Charles-Henry Monchau, investing chief at Syz Group, wrote in a Tuesday post cited by the outlet. "Token deflation compresses the revenue line while compute commitments stay fixed." Monchau added that the competitive response from labs is already visible, with companies redirecting their focus from outright model performance -- a dimension where open-weight rivals have closed the distance to just a matter of months -- to advantages in distribution, memory, and context. Steve Hou, Silicon Data's head of research, said the drop may signal that existing supply across frontier and lower-cost models is already sufficient to handle most tasks. The decline could create new headwinds for AI leaders such as OpenAI and Anthropic at a delicate moment: both companies submitted confidential IPO filings to regulators this summer. Lower token prices risk training consumers to expect cheaper access, which can erode pricing power for providers over time. Equities were under pressure on Tuesday, with technology shares among the hardest hit. The Nasdaq $NDAQ Composite lost nearly 1% on the day, and the S&P 500 gave up 0.4%.