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AI Tokens Crash 90%, Yet Capex Targets $1 TAI Tokens Crash 90%, Yet Capex Targets $1 T

7/3/2026

Summary

AI Tokens Plummet

Silicon Data's LLM Token Index fell about 20% from May.
AI token prices dropped over 90% since 2023 while total AI spend doubled.
SanDisk, Western Digital, Micron and Seagate posted the highest returns among memory makers.
Thirty-four S&P 500 stocks doubled in 12 months, including 28 tied to AI infrastructure, while AI capex is forecast to reach $1 trillion by 2027 despite US and EU regulator costs pushing firms toward cheaper models.

Summary

Firms Pause AI

Half of surveyed firms have paused AI projects because expenses exceeded expected value.
Nearly a third of senior leaders cannot accurately forecast AI operating costs as usage-based pricing expands.
Amazon and Microsoft are launching forward-deployed engineering units, allocating $1 billion and $2.5 billion respectively to aid customer AI adoption.
Only 2 percent of Canadian executives report measurable productivity or cost-saving gains from AI, per a KPMG poll.

Summary

Companies Trim AI

Amazon removed KiroRank after employees gamed it by burning tokens on tasks.
Uber capped AI usage at $1,500 per employee after its CTO said the 2026 budget was exhausted in a demo.
The Linux Foundation created the Tokenomics Foundation to enforce discipline on AI token spending.
A 98% token-price drop sparked a 320% rise in AI expenses, while startups adopt BYOT and pricing like Agentic Work Units to protect runway.

Summary

AI Firms Pay

Anthropic moved enterprise customers to usage-based billing in April 2026, and GitHub did the same for Copilot.
Analysts forecast a 30-50 % rise in AI bills once true infrastructure costs are reflected.
Faros AI study found code churn surged over 800 % after heavy AI adoption, indicating massive rewrite waste.
OpenAI spends nearly $2 for every $1 earned on inference and loses money on $200-per-month subscriptions.

History

Historical Context

In 2009 AWS introduced EC2 Spot Instances, selling spare capacity at discounts of up to 90% but with no SLA and a two-minute interruption notice. The model spurred other clouds to offer fixed-term discounts and later inspired AI firms in 2026—such as Amazon, Microsoft and Anthropic—to impose usage-based token caps to curb runaway compute spending.

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AI Tokens Plummet

Silicon Data's LLM Token Index fell about 20% from May.
AI token prices dropped over 90% since 2023 while total AI spend doubled.
SanDisk, Western Digital, Micron and Seagate posted the highest returns among memory makers.
Thirty-four S&P 500 stocks doubled in 12 months, including 28 tied to AI infrastructure, while AI capex is forecast to reach $1 trillion by 2027 despite US and EU regulator costs pushing firms toward cheaper models.

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