20VC Partner Sees 99% AI Token Price Drop Fueling Bigger Market

20VC partner Paul Bonnet argues that the long-term value of generative AI should not be judged solely by revenue per token. Continued advances in models, semiconductors and data centers could lower inference costs enough to unlock new products and use cases. In that scenario, rapidly expanding demand would more than offset cheaper tokens and create an AI application market substantially larger than today’s.

In recent remarks, Bonnet said AI token prices could fall 99% if the technology develops successfully. He compared the outlook with aluminum, whose price plunged over roughly a century after production breakthroughs made the metal widely accessible and opened uses across transportation, construction and other industries. The analogy suggests cheaper computing could expand overall AI consumption exponentially rather than shrink the market.