Open-source AI is undercutting Big AI's margins. Even amid the rapid scale of AI, open-source models cost far less per token, the basic unit of AI computing. For example, Anthropic’s Fable 5 model was more than 50 times more expensive per token than DeepSeek’s V4 Pro. Other open-source models from Alibaba, Moonshot AI, and Nvidia are also competing at a fraction of the cost of leading proprietary models. As cheaper alternatives improve, proprietary AI companies will face increasing pressure to lower prices. This could potentially squeeze profit margins all as CapEx is surging. Keep watching open-source AI.