AI token spending jumps 122% to 160% as prices fall 67%, a16z data shows

Cheaper AI inference is driving more total spending, not less, as agents consume tokens at a far higher rate than humans AI just got a lot cheaper, and companies responded by spending a lot more on it. Venture firm a16z reports that average AI token prices have fallen 67% since May 2026, while total token spending has climbed more than 120%, with estimates ranging from 122% to 160%. The data appeared in the firm’s Charts of the Week, published on October 31, 2026. First, a quick vocabulary check. In this context, a “token” is the billing unit for AI model inference. It is a small chunk of text a model reads or writes, and providers charge by the token. The headline divergence is stark. Per-token prices dropped 67% since May.