AI token prices collapse as enterprise spend growth slows
Data from Ramp shows AI token prices dropped nearly 15% last month as competition intensified among American AI labs. While token usage increased, overall spending growth slowed, signaling a shift toward price-driven competition.
Data from Ramp's AI Index, covering over 85,000 American businesses, shows overall AI spend grew less than 2% month-over-month in October. OpenAI's token spend growth fell to 2.1% and Anthropic's to 0.5%. Although businesses used 30% more tokens in October than the previous month, they spent only 10% more, indicating collapsing prices. The average price per million tokens is 55 cents at Anthropic and 50 cents at OpenAI, down almost 15% last month.
Ara Karazian, lead economist at Ramp, attributed this to a price war driven by new American AI labs like SpaceX AI and Meta, rather than Chinese models, which hold less than 5% of business spend. Karazian argues that the AI market is shifting from a two-way race to a four-way competition, which will accelerate price drops and force model companies to find new revenue sources outside of engineering use cases.
Anthropic's Q4 business spend is on track to increase 15% to 25% quarter-over-quarter, down from 47% growth in the previous quarter. The top 1% of companies drive 80% of spend toward OpenAI and Anthropic, with 80% of that top tier being VC-backed. This concentration highlights the reliance on a small number of high-volume users to sustain revenue amid falling unit prices.