Palo Alto Networks: AI Token Costs Must Drop 90%

The CEO of Palo Alto Networks says AI token costs need to drop by 90% for widespread business adoption. This pricing is currently a major obstacle for companies trying to use the technology. He expects costs to be one-fifth of current levels within a year, and just one-tenth the year after. While a recent 54% efficiency improvement is a good start, he believes more is needed. Other corporate leaders share concerns about high model pricing preventing AI's enterprise-wide use. Even with headline per-token rates dropping significantly, total enterprise AI spending has tripled. This is because AI applications multiply consumption much faster than unit prices fall. Some companies are already capping employee access to expensive AI tools or using cheaper, open-weight models. The bottom line is that while demand for AI is infinite, the current cost structure is challenging businesses and driving them to seek more affordable solutions.