Zephyr#1695
Our LLM Token Expenditure Index should really have been named the “Token Expenditure Price Index” bc it’s an expenditure or usage-weighted average token price index. It tells you how much currently the entire market AI is paying for a million LLM tokens irrespective of models.
The naming might’ve led to some misinterpretations as some seem to have interpreted the index as either the total volume of token used or the average price of tokens. In reality, the index captures something more subtle than either interpretation: it tells us the marginal willingness to pay for LLM models.
Over the course of the year, while model token prices haven’t moved that much, the usage patterns have moved dramatically leading to the token index movement down and then up sharply as AI users moved en masse into using cheap open weight models and then en masse to the much more expensive frontier closed source models. From consumers to enterprises, everyone is Claude-maxxing!
More recently, as can be seen in the chart below, the token index has stagnated, which suggests that usage migration towards frontier models has slowed. Time will tell whether this is just a pause or an inflection in the trend as users move back towards open weights models. In a sense our token index could be roughly interpreted as a “quality premium” of frontier models over the much cheaper open source models (if we assume users and prices are both “rational”).
For more details on what we offer beyond the few indices we’ve listed on the Bloomberg Terminal, check us out at http://www.silicondata.com and give us a holler! 😊
