TS Lombard points out that while the price of individual tokens continues to decline, token usage is still growing rapidly, primarily driven by more complex applications such as AI agents, inference, and programming tools, thus leading to a continued increase in overall computing power demand.
The report believes that the recent strong performance of large cloud vendors is mainly due to the continued scarcity of computing power. Large cloud vendors such as Microsoft, Amazon, and Google possess vast customer ecosystems and distribution channels, making it easier for them to gain market share and thus giving them stronger pricing power; competitors with narrower channels rely more on price reductions to compete. At the same time, the training and running costs of cutting-edge AI models remain very high, while performance improvements are relatively limited.
