As Token Costs Plunge, Enterprise AI Providers Face a New Margin Squeeze

Businesses are shifting to cheaper AI models and getting large token discounts, pushing token prices down.

That is squeezing margins for generative-AI providers such as OpenAI and Anthropic as pricing power weakens.

Cheaper model makers and chip suppliers are gaining share and leverage across the AI supply chain.

The trend could reshape where profits accrue in enterprise AI and how investors value the sector.