Within a single 24-hour period in July, leading AI model providers engaged in an intense price war, with SpaceXAI launching Grok 4.5, OpenAI introducing GPT-5.6 variants (Sol, Terra, and Luna), and Meta releasing Muse Spark 1.1. The AI market underwent a "structural reset," slashing the cost of AI output tokens from $25-$50 to $4-$6, unlocking unprecedented scale and accessibility and fundamentally changing how businesses approach artificial intelligence. Stuart Russell, a UC Berkeley AI expert, raises concerns about a potential "AI bubble" bursting due to underwhelming revenues and plateauing large language model performance.
Cheaper tokens and cheaper breakthroughs are not the same thing.