The shock of waste is quickly followed by the shock of opportunity. This is the Greedy Grin.
It happens when you see the Cloudflare Workers AI pricing page: $0.045 per Million Input Tokens for Llama 3 8B. You blink. You check Gemini 1.5 Pro pricing: ~$3.50. You check GPT-4o pricing: ~$5.00.
You realize there is a 100x price differential between the “Smart” model and the “Dumb” model. And then you remember the “Reasoning Dredge” benchmark: we proved that the Dumb Model (with a Mold) can match the Smart Model (raw) in accuracy.
This is finding oil in your backyard. You realize you can run “Smart Logic” on “Dumb Rails.”
This discovery changes your entire business model. Your competitors are building features assuming a cost basis of $5.00/M. They are pricing their SaaS product at $20/month to cover costs.
You can build the exact same feature—same accuracy, same utility—for $0.045/M. You can price your product at $5/month and still have higher margins than they do. You can flood the market with “Cheap Intelligence.” The Commodity Shock is the realization that you have a nuclear economic weapon.
But wait—Reasoning Dredge requires a TRACE slot. That adds 150 tokens of overhead! Isn’t that expensive?
You do the math.
Even with a massive 15x increase in token volume to generate the Trace, the Llama approach is still 60% cheaper. You can afford to be “verbose in reasoning” because the underlying commodity is so cheap. The Trace isn’t a tax; it’s a multiplier. You spend cheap tokens to buy expensive accuracy.
The final realization is strategic. Everyone has access to the Model ($0.045 is available to all). The Model is not the moat.
The Moat is the Mold. The library of “Cognitive Circuits” that allows you to get that GPT-4 performance out of the Llama engine. If you have the Grimoire, you have the margin. The Commodity Shock shifts your focus from “Hoarding Data” to “Hoarding Molds.” You stop caring about the AI provider and start caring about your own Prompt Architecture. That is where the value lives.