⚠️AI pricing is collapsing, raising questions about AI returns: The LLM Token Expenditure Index, which tracks the market price companies pay for AI model output, has fallen to just $0.97, its lowest level since the index was created late last year and more than -50% below its summer peak. Token prices are collapsing as cheaper models, open-source Chinese competitors and falling inference costs make AI increasingly commoditized. That is great for AI users, but potentially much worse for model providers, as falling prices directly erode revenue and pricing power while massive compute commitments remain largely fixed. The bigger concern is what this means for the returns on the hundreds of billions being poured into AI infrastructure, if the price companies can charge for AI output keeps falling. The AI boom depends not just on demand, but on that demand generating enough revenue to justify the enormous capital spending behind it. If AI output becomes a commodity faster than demand can absorb the falling prices, the biggest AI valuations could face a serious reality check.