What if a frontier lab cuts output-token prices by 90%?
A frontier lab cutting flagship output-token prices 90% in a margin war craters rivals' API economics, modestly pressuring Nvidia and capex via uncertain inference monetization plus high-beta crypto. Rhymes with the 2023-24 OpenAI/Anthropic/Google token price war that repeatedly halved API costs. Skeptic's note: cheaper tokens expand usage (Jevons), so the volume offset means this is bearish for AI-software margins but ambiguous-to-bullish for compute demand — the shallow Nvidia move is right.
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The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 0–6 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. A frontier lab slashes flagship-tier output-token prices 90% and declares a margin war, cratering rivals' API economics. The trigger decomposes into signed root‑shocks — AI capex ▼ · Risk appetite ▼ — which propagate through our causal graph to the markets below.