Ways to think about token pricing — Benedict Evans

Ways to think about token pricing

Benedict Evans argues token pricing is in a supply crunch that won't last. Over a trillion dollars in data center capex is coming, and inference efficiency is improving fast. The recent demand surge is driven almost entirely by one use case—software development—which is a small market. He leans toward foundation models becoming low-margin commodity infrastructure rather than capturing sustainable pricing power. The piece frames the question around four variables: how many use cases will pay for frontier performance, how long the frontier keeps moving, whether competition stays fierce, and how much value the model itself captures versus the tooling wrapped around it. No specific price forecasts or timelines are given.

Why it matters: Benedict Evans delivers a framework-driven take on token pricing, arguing foundation models will become low-margin infrastructure. The view is clear and data-backed (trillion-dollar capex, demand concentrated in software dev), directly useful for practitioners. Score held at 7...