Self-hosting takes either cloud- or on-prem-engineering chops, which are in short supply. In my view, that becomes the primary driver for lowering token costs. Secondary are the alternative model sources like Z.ai and Moonshot, which between open weights and lower prices help to drive commoditization. But there is a political risk with these, for example, Z.al is on the U.S. Department of Commerce Entity List, which blocks American companies from selling advanced technology and goods to the firm.

That would be even worse for them, since then current customers of these AI-middleman corpos would just start deploying their own self-hosted and private LLM services. In before the complexity argument, there may well be some completely different middlemen corpos, who will assist in such deployments and initial ramp-ups.

Because that's been the playbook of every tech company for a decade or two. It should be our expectation that this stuff will get an expensive rug pull the instant the companies can get away with it.

There seems to be a weird self-fulfilling narrative here:

1) "AI companies will go bust because tokens will cost too much" >> 2) "Don't let them build data centers that will sit empty" >> 3) Demand outstrips supply by a lot >> 4) Token costs too much.

This is no different from the NIMBY's that block all the housing then sit in a huff saying "see! everyone's leaving. good thing we didn't build anything!" when the rents go up.