Tokenomics will lead to opportunities in 'edge AI,' Citrini says (original) (raw)
'Tokenomics is beginning': The firm behind the viral AI doomsday post says rising costs will reshape the market's hottest trade
A data center in Vernon, CA Mario Tama/Getty Images
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"Free AI is ending. Tokenomics is beginning."
That's the message from Citrini Research, the firm that sent the stock market into a tailspin with a report on the potentially dire economic impacts of AI earlier this year.
As AI power users focus their efforts on "tokenmaxxing," or maximizing their use of AI tools to boost productivity and stay ahead on internal leaderboards, Citrini says the associated costs will reshape the market's AI trade.
"Tokenomics" refers to the economics of AI usage as measured by tokens, the blocks of text or code being constantly processed by large language models. While tokenmaxxing has already become one of the hottest workplace trends of 2026, Citrini says the economics are unfavorable for companies.
The tech industry has been rocked by a surge in demand for tokens as companies push their employees to continuously scale their AI usage. The bill is already coming due, and in Citrini's view, it marks a sea change in how companies will approach AI.
"The deepest pockets in the world — hyperscaler cash flow, venture capital, sovereign wealth, public credit, private credit, public equity — are footing most of the bill," the author noted. "Eventually, customers have to start picking up the tab."
So, what happens when they do?
Citrini maintains that the AI boom will continue to shift toward a more spending-conscious phase driven primarily by efficiency, as companies seek out ways to lower AI costs.
This could be accomplished by local inference, such as running AI models on a device like a PC, something that Nvidia has recently doubled down on helping users do through its new PC chip. This could create a new class of AI winners, Citrini said
"AI devices, running local models, will eventually be a thing," it added. "This trend will not wipe out cloud computing or large, remote models — it's both-and instead of either-or."
Citrini sees a shift toward "edge AI" as the next phase of the boom. Importantly for investors, the new dynamic could create a range of opportunities.
"The first AI trade was solely about centralized compute. As that becomes more adequately priced in, we see more asymmetry available in distributed inference, the surrounding hardware, and the software required to secure and orchestrate it all."
Edge AI refers to a computational model that runs AI either on or near a device without sending every task to a cloud or a data center.
In this case, edge AI is a broad ecosystem that distributes computer power across many different devices that can include not just powerful PCs, but also laptops and smartphones.
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Samuel O'Brient is an experienced financial markets and business journalist who has written extensively on a wide range of topics involving economics, technology and public policy. At Business Insider, he covers important macro and micro economic stories, including takes from leading economists and hedge fund managers, breaking IPOs, corporate bankruptcies, meme stocks and short-selling. He also writes on other markets such as crypto, oil and real estate.He has interviewed many of the market’s most influential voices, ranging from top economists such as Mark Zandi and Richard Thalerto prominent investors including Danny Moses, Andrew Left, Anthony Scaramucci, Louis Navellier and Grant Cardone.Programs such as LiveNOW from Fox and Taking Stock have had Samuel on to discuss stock market developments. His reporting has been cited by The New York Times DealBook, Bloomberg Radio, Forbes, Entrepreneur and TheFutureParty.Samuel began at InvestorPlace, covering investing, retail trading and macro economic trends. Prior to joining Business Insider, he served as a technology markets reporter at TheStreet. He is a graduate of Sarah Lawrence College and Trinity College Dublin.Samuel's work has appeared in publications such as TipRanks, EV and Observer. When he isn't chasing down stories, he can often be found browsing book and record shops. To reach Samuel, email him at sobrient@insider.com or connect with him on LinkedIn. He is also on Signal as Samuel Clemens. Popular Articles: A Nobel economist has a warning for meme stock tradersThe business school dropout who kicked off the Beyond Meat rally wants you to know he's not Roaring Kitty 2.0A top economist who thinks we're on the brink of a recession says he's eyeing these 3 warning signsTrump's 401(k) executive order marks big changes for retirement savings — and possibly puts your money at riskWhy hedge fund icon Ray Dalio says you shouldn't invest in real estate in this economyAI bullishness is soaring, but pros see a major opportunity brewing in an overlooked corner of the market
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