MODEL · T16
Will the per-million-output-token list price of the flagship frontier models from OpenAI and Anthropic fall by at least 40% from their 2025 levels by the end of 2027?
Competition from near-frontier open-weight models (especially Chinese labs) and zero-switching-cost routing forces US frontier labs into repeated list-price cuts, so flagship output-token prices fall at least 40% versus 2025 levels.
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Model prices fall toward cost
Near-zero switching costs at the model layer plus open-weight models at a fraction of the price push buyers to the cheapest adequate model, making list price the competitive variable. Frontier labs cut published API prices repeatedly, compressing revenue per token toward the cost of serving and eroding model-layer margins.
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The case against it
Every inference has a real cost in tokens and GPU cycles that does not trend toward zero with scale, so distribution becomes a survival system rather than a growth channel because undisciplined distribution scales adoption and bleeds faster with every user added. It would show first if flagship frontier list prices hold flat or rise through 2027 while labs push premium reasoning tiers.
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