Cathie Wood highlights AI token price collapse as demand surges in ‘virtuous cycle’

The cost of using AI just got dramatically cheaper, and Cathie Wood wants everyone to know she called it. The ARK Invest founder pointed out that the average price per million tokens for large language models has dropped from $2.07 to $1.02, a decline of more than 50% that happened in a matter of weeks. Wood framed the data as evidence of what she calls “enormous price elasticity of demand” for AI-driven productivity tools. Translation: cut the price, and usage doesn’t just tick up. It explodes. The economics of getting smarter, cheaper The $2.07 figure was the going rate on May 28. Roughly a month later, that number sits at $1.02. For context, a “token” in AI parlance is a chunk of text, roughly three-quarters of a word, that a language model processes. A million tokens is about 750,000 words, or the equivalent of feeding the model roughly ten full-length novels. That kind of price compression doesn’t happen by accident. Wood attributes it to two forces working in tandem: aggressive price cuts from OpenAI, the market’s dominant closed-source provider, and the arrival of cheaper open-source alternatives from companies like DeepSeek and Kimi. DeepSeek and Kimi are reportedly offerin...