Excess Returns · Thursday, September 3, 2026
Dan Niles is closely monitoring two key factors for AI growth: the number of tokens being produced and the price per token. Since May, the price of AI tokens has dropped by 50% due to the rise of open-source models. However, the volume of tokens produced has more than doubled in the same period, suggesting a potential offset.
“There's number of tokens being produced and what you can charge for each of those tokens.”
“And what you've seen since end of May is what you can charge for those tokens has gone down by about 50%.”
“Except that the number of tokens being actually produced is up two and a half times since the end of May.”