Silicon Data’s LLM Token Expenditure Index hit a record low of 97 cents on Monday, more than halving from its peak earlier this summer. The decline is part of an aggressive AI price war, with cheaper open-source and open-weight models from Chinese developers like Moonshot AI’s Kimi providing alternatives to OpenAI, Anthropic and Google offerings. OpenAI also cut prices across parts of its GPT-5.6 lineup. Lower token prices are making AI agents, coding assistants, customer service systems and enterprise automation more economical for businesses and developers. Frontier AI labs face margin pressure from huge compute investments while unit prices fall. Anthropic is expanding compute capacity through major infrastructure agreements. Competition may shift toward distribution, enterprise integrations, proprietary data, persistent memory, AI agents and software ecosystems. The trend raises questions about whether AI demand will grow fast enough to offset the falling price of intelligence.