“We keep seeing Jevons paradox play out at every level, which is as you cut the cost of tokens … more and more use cases, enterprises use it more and more. And the net result is that the total demand just keeps going up and the total revenue and market size keeps growing. Also, just to reiterate a point that you made earlier in the program, the new applications that are coming all consume a lot more tokens than the ones that we started with, right? Like agents use a lot more tokens than prompting, and cyber defense is going to use a lot more tokens than just doing, you know, a pen test once a year.”

…not just because they're giving up pricing power, right? It's not that they're losing margin. They're actually gaining margin. The reason they're able to do that is because all the algorithmic improvements they're making in order to make their models much more efficient. Yes. And here you go. Just

…you need it. If they can keep making their second and third run models this much cheaper, 10x cheaper each year, the Jevons paradox is going to get even more pronounced because enterprises will use it more. Token cost matters, right? We're sitting here with the token max and corporate. Now, look,

of tokens, yes. Exactly.

So the price will keep going down, but the market size keeps increasing. I think the biggest risk factor to Anthropic, I do think it is some version of the open source models, maybe not catching them, but sort of saturating intelligence at a low price point for some. Commonizing

it. Commonizing it for things like coding