This may just be a classic case of Jevons paradox: https://en.wikipedia.org/wiki/Jevons_paradox

In short, better hardware will drive down token cost in the near-term, but will drive up the demand for tokens as it gets cheap enough for other sectors to start to use it heavily.

It comes from steam engines where economists originally thought that coal demand would plummet with more efficient engines, but it actually just meant that we found more uses for steam engines.

There is just so much downward pressure on token price, from every direction. We would need a completely new understanding of economics to explain why the price shouldn’t go down. Or market collusion/regulatory manipulation.

Token prices coming down means nothing if the models keep wasting them

With the corollary that old hardware valuations will plummet with them.

Although given we have marginal pricing we need to push through to those lower prices in the face of increasing demand, so timing of this is uncertain and the key to the AI financial markets

Hopefully this also means billionaires can stop trying to drop data centers into residential neighborhoods with zero noise control and polluting on-site generators, signing local politicians on with NDAs, calling for eminent domain to seize homes to build power lines to data centers, etc. etc. etc. Not to mention the water use controversy.

Token prices plummeting is probably a good thing, but not without the regulatory backstops that prevent these effectively industrial facilities from being operated with no regard for the externalities they impose on people who live near them.

Yeah but is it really even as good as Rubin? Seems just competitive.

this is a story about a proprietary accelerator being built/designed by a token provider. and you think they're going to return the efficiency gains to the customer instead of capture the value for themselves? interesting take.

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