AIThe Decoder1h ago
Cheaper AI tokens are driving more demand, and that's Jensen Huang's
Cheaper AI tokens are driving more demand, and that's Jensen Huang's best-case scenario
TL;DRCheaper AI tokens boost demand, keeping GPU prices high despite falling costs.
Why it matters: Reveals whether AI infrastructure growth is sustainable or heading toward a demand cliff that hurts Nvidia and cloud providers.
Data from a16z shows a Jevons paradox in the AI market: token prices keep falling, but H100 GPU rental prices hold steady or climb. Cheaper AI drives demand faster than costs drop. If that demand flattens, the chain from chip makers to cloud providers takes a hit. The article…
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