Cheaper AI tokens are driving more demand, and that's Jensen Huang's best-case scenario
AI Summary
AI token prices are falling while H100 GPU rental prices remain stable or increase, creating a Jevons paradox where cheaper AI drives demand growth faster than cost reductions. This sustained demand benefits chip makers like Nvidia and cloud providers, but a flattening in demand could negatively impact the entire supply chain.
From the source
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 Cheaper AI tokens are driving more demand, and that's Jensen Huang's best-case scenario appeared first on The Decoder.
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