The Inference Paradox: Why Engineering AI Costs Rose 5x Despite 80% Token Price Drops

Every major model provider has slashed token pricing by 70% to 85% over the past 18 months. By all traditional cloud accounting rules, company AI bills should be dropping rapidly.

Yet, Gartner data and CTO reports show that average AI infrastructure spend per engineering team has surged over 500% in 2026.

This is The Inference Paradox: as tokens become cheaper, teams deploy multi-step agentic loops, recursive reasoning, and automated test synthesis that consume 50x to 100x more tokens per task than simple single-prompt queries ever did.