PANW, OpenAI, Anthropic In Focus — Nikesh Arora Says Wider AI Adoption Needs 90% Lower Token Costs

• Enterprise adoption of artificial intelligence tools is hitting budget walls, requiring a pricing drop of up to 90% over the next two years, Arora told CNBC in a televised interview. 
• While OpenAI’s newest models offer over 50% better token efficiency for advanced agentic coding tasks, tech leaders argue that per-token infrastructure costs remain too high for unlimited enterprise experimentation. 
• Escalating enterprise AI expenditures are driving some organizations to seek cheaper tools, including Chinese alternatives.

Artificial intelligence token prices must plunge by as much as 90% before the technology can achieve widespread, sustainable enterprise adoption according to Palo Alto Networks Chairman and CEO Nikesh Arora.

Speaking on CNBC’s "Squawk on the Street," on Thursday, Arora emphasized that while current artificial intelligence capabilities feature immense demand, the ongoing financial toll on corporate budgets remains a significant bottleneck for Chief Information Officers (CIOs) worldwide.

Palo Alto (PANW) stock jumped about 5%, while Gemini Owner Alphabet (GOOG) (GOOGL) share price eased about 1.5% at the time of writing. 

Efficiency Vs. Scale

Arora’s comments came in response to recent announcements from leading AI providers, including OpenAI’s claims that its newer models achieved a 54% gain in token efficiency for complex agentic workflows. While the cybersecurity executive welcomed the development as a positive trend, he maintained that it is merely "a good start."

According to Arora, token pricing models must compress further to match enterprise needs. He projected that prices must fall to at least 20% of their current levels over the next 12 months, followed by an overall 90% reduction by the second year.

The costs of integrating AI in daily workflows seem to be building up quite a bill. Rather than freely experimenting with workflow reimagination, many businesses are either optimizing existing investments or seeking alternative avenues. 

For instance, coffee chain maker Starbucks announced on Thursday its plans to build its own AI tools to support daily tasks. 

AI Token Pricing: Overview 

The primary framework driving enterprise AI software expenditure relies on pay-as-you-go developer models, measured in millions of tokens. 

PANW Stock: Retail View 

Retail sentiment on Stocktwits was ‘neutral’ with ‘normal’ message volumes. Retail chatter around the stock has risen about 6% over the past week and over 50% over the past month. 

PANW stock has gained 64% over the past year. 

Read More: SBUX Stock Set For Best Day In Two Months — Starbucks Steps Up AI Push To Cut Reliance On MSFT, IBM

For updates and corrections, email newsroom[at]stocktwits[dot]com.