Why Falling Token Prices Don't Mean Collapse: The Paradox of AI Usage and Revenue
Discover why plummeting AI token costs are actually expanding market size by 1000x, fueling the agent economy, and reshaping software value chains.
When radical cost reductions driven by technological advancement stimulate market fear, we always encounter the economics of paradox. The paradigm shift of the token economy goes far beyond simple price destruction, completely reorganizing the flow of capital.
Core Insights
1. The Paradox of Price and Economic Dilemma
From the perspectives of macroeconomics and industrial organization, the total revenue of any commodity is determined by the product of price (P) and quantity (Q). Recently, the price per million tokens of artificial intelligence models, led by OpenAI, has suffered an extreme deflation, plummeting by a staggering 97 percent from early levels. According to the traditional logic of economics textbooks, unless demand increases explosively while unit prices fall this steeply, the industry should face catastrophic restructuring. This is precisely where market participants felt terrified by the catastrophic scenario known as SaaSocalypse.
The drop in price is not the prelude to doom, but the most certain harbinger of a new ecosystem called popularization and universalization.
However, this phenomenon is merely a misreading of the essence of creative destruction advocated by Schumpeter. The rapid decline in unit costs immediately leads to a dramatic expansion of accessibility, which in turn creates vast new demands that were previously unimaginable. Just as the price crash of cotton textiles during the Industrial Revolution actually stimulated mass consumption and gave birth to a massive textile industry, the drop in AI computing costs acts not as simple margin compression, but as a catalyst expanding the TAM (Total Addressable Market) of the entire market by tens of times.
2. The Agent Revolution and the Rediscovery of Tools
One of the most misunderstood concepts in the evolution of artificial intelligence is the possibility of the demise of software companies. The argument that generative AI will eradicate all existing application software is no different from the illusion that humans will abandon tools and build civilization with bare hands. As NVIDIA's leadership accurately insightfully noted, Agent AI, which thinks and acts autonomously, requires numerous specialized tools to perform work, just like humans do.
- Excel
- PowerPoint
- Salesforce
Traditional software applications like these serve as the digital hammers and screwdrivers that AI agents must equip themselves with to execute labor. While human labor is restricted by absolute numerical limits due to biological constraints, software-based agents can be infinitely copied and scaled. If the number of human workers remains fixed while the number of agents increases exponentially, the usage of existing application software consumed and utilized by them will skyrocket to unimaginable levels.
Ultimately, software companies will reign not as the subjugated entities replaced by AI, but as the core beneficiaries supplying the essential infrastructure of the agent economy. The combination of toolmakers and tool-wielding intelligence creates a new form of added value, fundamentally restructuring the topography of the software industry.
3. Value Chain Migration and the Existential Choice of Investors
South Korea's capital market structure is uniquely concentrated on hardware and semiconductor infrastructure. While the strategy of filling a significant portion of portfolios with memory semiconductor and foundry companies has yielded great returns in the past, as the maturity of the AI industry increases, the center of the value chain inevitably shifts upward. While chips and infrastructure located at the bottom of a massive five-story cake structure lay the foundation, the true massive harvest of wealth ultimately occurs in the software ecosystem located at the top, providing application services and creating practical utility.
Concentrated investment in semiconductors is not wrong, but it is a high-stakes gamble that can only survive if accompanied by a clear exit strategy and risk management plan. Contrary to market consensus, when a macroeconomic crisis breaching previous lows strikes, a cool-headed judgment capable of taking aggressive short positions and a comprehensive perspective that transcends a chip-centric single vision are required. In the grand flow where the prosperity of hardware leads to the innovation of software, capital must look beyond simply owning high-performance chips to the future services and platforms those chips will create. Are you truly breaking away from the illusion of hardware and accurately targeting the final destination where AI will make real money?
This post is based on content from the YouTube channel 이효석아카데미.
Watch the original video: https://youtu.be/kSOMokBpT4U
Note: This content is a column written with AI analysis based on the referenced video. For accurate context and the creators intent, we recommend watching the video via the link above.
