PredictionArticle
Falling token costs won't necessarily reduce total AI spending, because cheaper tokens drive higher consumption and thus higher inference demand — which is also why open-source model business models are viable, since providers make money running inference in the cloud rather than on-device.
Box CEO Aaron Levie argues cheaper tokens won't shrink AI spending because falling costs drive up usage and inference demand, which is good news for infrastructure providers even in an open-source world. ✦ AI generated
Aaron Levie · Big Technology · 2026-07-20 · original ↗
Falling AI costs might not lead to lower AI spending if higher consumption leads to higher inference demand, said Box CEO and co-founder Aaron Levie: "For the foreseeable future, anything that lowers the cost of tokens will drive up inference demand. This also gives you some insight into why even open source business models work in AI. No one is running these models on their devices; they're running them in infra. Great time to be one of those providers."
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extends → The application layer will persist because companies that gather unique user signals can encode that value into workflows and post-train specialized models on those signals.Tuhin Srivastava · No Priorsprovides context → The Chinese open-weight models are a significant development but not surprising — they represent continued competent execution along a predictable trend, and the real story is how the US is reacting to them.Jason · 20VCexplains mechanism → Token costs will fall roughly 10x over the next three years, and that price collapse will drive roughly 100x growth in AI usage.Lin Qiao · 20VCexplains mechanism → The entire AI industry addressed the biggest skeptical response — hallucination — through reasoning and grounding, and the improvements across language, vision, robotics, and self-driving cars were big leaps.Jensen Huang · No Priors