This is one reason lower model prices do not guarantee lower enterprise AI budgets. For the cost stack implications, see AI TCO Framework.
Glossary entry
Jevons Paradox
The tendency for total consumption to rise when efficiency improvements make a resource cheaper or easier to use.
Why it matters
In AI, Jevons Paradox matters because falling per-token or per-inference costs can still lead to higher total spend if usage expands faster than unit cost falls.
Explore next
Continue exploring
Follow the threads that connect AI cost, value, governance, and operating discipline.