Venture capitalist Chamath Palihapitiya warned on CNBC that steep premiums charged by AI developers like OpenAI and Anthropic are on a collision course with drastically cheaper models from Meta Platforms Inc. and Elon Musk’s xAI, triggering a severe market rationalization. Introducing the concept of a “barrel of intelligence”—representing roughly one million AI compute tokens—Palihapitiya noted that OpenAI sells one for “26 bucks” and Anthropic’s latest model costs “56 bucks,” while competitors release models he estimates are “80 to 95% as good.” He stated, “Elon is selling you a barrel of intelligence for a buck. Zuck is about to sell it to you for a buck 50. Demis and Sundar are trying to sell it to you for a dollar. The Chinese will sell it to you for $0.50,” arguing a pricing “rationalization has to happen.” Palihapitiya said giants with massive existing infrastructure, like Meta and Alphabet Inc.’s Google, are “finally getting their footing,” and questioned buying a “$50 barrel of intelligence” for everyday business functions. He warned that enterprises locked into expensive vendor contracts may face “downstream difficulty” and predicted surprise corporate earnings misses as executives discover runaway “token maxing” expenses.