The main demand signal for artificial intelligence looks explosive on paper, but it may be significantly overstated. Anthropic, by pricing its tools for that reality, might be the best-positioned AI company if a correction comes.
Tokens are the basic unit of AI usage: words and characters that make up both the queries users send and the output models generate.
Chatting with an AI consumes a couple of hundred tokens per paragraph. Agentic AI, where models write code, browse the web, and execute multi-step workflows, burns through thousands more per session.
Using the rates of Anthropic’s latest model, one million tokens of input (prompts) costs $5, and one million tokens of output (the model’s responses) costs $25.
AI companies cite the boom in token consumption to justify the hundreds of billions of dollars being spent on infrastructure to serve it.
