Goldman Sachs warns that the collapse in AI token prices threatens the profitability of massive investments in AI infrastructure. The Silicon Data LLM Token Expenditure Index dropped 29% in August 2026 to a record low of $0.97 per million tokens, more than 50% below its May 2026 peak of roughly $2.05. Hyperscalers including Meta, Microsoft, Amazon, and Alphabet face margin compression as return on invested capital has hit an all-time low. The rise of open-source models and rapid improvements in proprietary models are putting downward pressure on pricing, creating structural risks for tech giants committed to unprecedented capital expenditure programs in the technology sector.
Source: Read the original article
