Price becomes a ratio
post price = baseline price x (1 - compression)
An 80% reduction leaves a 0.2 price ratio. That ratio drives both unit price and the demand response.
Inference Elasticity Lab
Find the demand threshold where cheaper tokens stop shrinking spend and start enlarging the infrastructure value pool.
Scenario inputs
All values are assumptions. Nothing here is live provider pricing, a market forecast, or investment advice.
billion
USD / 1M
percent
coefficient
percent
percent
percent
percent
Unit check: one billion tokens contains 1,000 million-token units. The bundled case therefore starts at $216,000 of customer spend, not $216 million.
Awaiting a valid scenarioRun the bundled case or adjust assumptions to compute the pool boundary.
INFRASTRUCTURE POOL EXPANDS
Demand and capture-share gains outrun the token price decline.
Post price$2.400 / 1M
Demand multiple13.1326x
Post token volume236.3875B
Customer spend$216.000K to $567.330K
Pool delta+$98.893K
Pool change+381.5%
Break-even elasticity0.623
Model gross profit$194.400K to $255.299K
Infrastructure dollar pool
Pool bars: $25.920K to $124.813K
Shrinking pool+0.977 above thresholdExpanding pool
Demand 0.2000^-1.600 = 13.1326x; spend response = 2.6265x.
At the selected elasticity, higher volume and a larger infrastructure capture share expand infrastructure dollars despite lower token prices.
Follow every dollar.
The source thesis is conditional. Price, volume, and capture share have to be modeled together before margin redistribution has a direction.
Elasticity turns price into volume
demand multiplier = price ratio ^ (-elasticity)
At 1.6 elasticity, a 0.2 ratio produces 13.1326 times the baseline token volume. This is a scenario relationship, not a measured market law.
Capture share sets the pool
infrastructure pool = customer spend x infrastructure capture share
The threshold solves the elasticity that makes the post-compression pool exactly equal to the baseline pool.
What this model can and cannot say.
Assumptions you control
Baseline token volume and price establish the dollar scale. Compression and elasticity shape demand. Capture share and model margin allocate scenario dollars. None is fetched from a provider or treated as current fact.
The low-elasticity counterexample
At 0.3 elasticity with the same 80% compression and capture-share shift, the demand multiple is only 1.6207x and the infrastructure pool contracts.
Important omissions
- Model quality and premium tiers
- Latency, utilization, and mix shift
- Power, networking, memory, and depreciation
- Fixed costs and competitive response