In-depth Analysis of Pricing Power in the AI Industry Supply Chain (USAD Upgraded Version)

I. Understanding the Complete Supply Chain First

The AI industry is a complex nine-layer value stack. To understand the underlying commercial essence, the critical question is: In whose hands does the pricing power of each layer truly reside?

Layer 9: End Users — Ultimate demand and final value capture 层8 AI 应用 (Agent、Copilot、客服等) — 消耗 Token

Layer 8: AI Applications (Agents, Copilots, etc.) — Consuming tokens as raw materials

Layer 7: Token / API ★ KAI.com Strategic Position — Standardized inference output

Layer 6: Model Inference/Training (300+ Chinese LLM Vendors) — Converting GPU compute to tokens

Layer 5: Cloud Computing / GPU Rental (Alibaba Cloud, Huawei Cloud, AWS, etc.)

Layer 4: Server / Hardware (Inspur, H3C, NVIDIA DGX, etc.)

Layer 3: Chip Manufacturing (TSMC, SMIC) — Advanced node foundry production

Layer 2: Chip Design (NVIDIA, Huawei Ascend, Cambricon)

Layer 1: Raw Materials (Silicon, Rare Earths, Electricity)

II. Layer-by-Layer Pricing Power Diagnosis

Layers 1-3: Geopolitical Pricing, Not Market Pricing Chip Design: NVIDIA commands an 80%+ market share → Absolute monopoly/seller pricing. Chip Manufacturing: TSMC’s advanced nodes are exclusive → Also a monopoly/seller pricing. External Shock: Export controls mean a single piece of document from US BIS can alter the entire supply curve. Core Conclusion: These layers lack a true price discovery mechanism—there is only “one price”. In the absence of multilateral game theory, the prerequisite for a futures market does not exist.

Layers 4-5: Oligopoly Pricing Cloud GPU: AWS, Alibaba Cloud, Huawei Cloud, etc. 3-5 tech giants set prices independently. Servers: Dominated by a handful of suppliers like Inspur, H3C, and Supermicro. The characteristics of oligopoly pricing are: stable prices (lack of full competition), high opacity (large customer bespoke negotiated agreements), and insufficient bilateral fragmentation (making it impossible to naturally form an exchange).

Layer 6: Extreme Fragmentation — The Vacuum of Pricing Power 🔴 Core Opportunity This is the most unique layer in the entire supply chain. Because both supply and demand are simultaneously hyper-fragmented, traditional institutional agreements or centralized pricing fail here: • • • • • • • • • •

Layer 6 (Current State of Chinese LLMs)

No. of Vendors

300+ vendors competing fiercely

Price Discovery

Non-existent — Each quotes its own price; buyers must compare manually

Volatility

Extremely High — Shaken by model iterations, GPU costs, and scheduling shifts

Structure

Purely Bilateral — Buyers engage suppliers one-by-one, highly inefficient

Standardization

Zero — Disparate API schemas, billing metrics, and SLAs

This is a no-man’s land of pricing power. Economic laws tell us that a fragmented market with 300+ suppliers and tens of thousands of demand-side users naturally demands a centralized venue for price discovery. This is not a personal preference—it is a structural necessity of the market.

Layer 7: Token — The Overlooked “Super Commodity” Tokens naturally qualify as a futures underlying asset because they perfectly satisfy all the core criteria of a standardized commodity: ✓ Standardized: 1 token = fixed computing load (standard benchmark customizable) ✓ Deliverable: Real-time API calls act as immediate consumption settlement ✓ Non-storable: Compute vanishes if unused (= electricity, requires continuous pricing) ✓ Highly Volatile: Driven by GPU shortages, model upgrades, and regulatory shocks ✓ Cross-border: Buyers and sellers can be located globally without physical friction Tokens are the crude oil of the AI era, but “cleaner”: zero transport costs, zero storage degradation, and zero grading disputes. • • • • • • • • • •

III. Why Pricing Power Inevitably Shifts from “Chips” to “Tokens”

Current Paradigm: NVIDIA Dominates Supply Chain Pricing Power NVIDIA sets H100 prices → Cloud vendors set GPU rental rates → Model vendors passively absorb compute costs → Token price = compute cost + margin → AI apps passively accept. Currently, NVIDIA is the sole price setter. However, this structure will inevitably break down due to three fundamental shifts:

  1. Compute moves from scarcity to abundance: As domestic chips (Huawei Ascend, Cambricon, Ha光) ramp up production over 2025-2027, and distributed inference technologies mature, compute sources will diversify, shattering the monopoly.

  2. Model competition shifts from an “arms race” to “cost optimization”: Among the 300+ vendors, capabilities of the top 50 are commoditizing. Shrinking differentiation accelerates price wars, driving token prices down and forcing vendors to seek hedging tools to secure revenue.

  3. Pricing power migrates downstream: This is the iron law of all industrial revolutions: 18th Century: Cotton plantations held pricing power (scarce raw materials) 19th Century: Textile mills held pricing power (scarce industrial capacity) 20th Century: Brands and channels held pricing power (scarce market demand) Early AI Era: NVIDIA holds pricing power (scarce microchips) Mature AI Era: Token markets hold pricing power (scarce price discovery) KAI.com bets on the arrival of this mature AI era—it does not gamble on which single model vendor wins, but bets on the ultimate victory of the “market mechanism” itself. • • • • • • • • • •

IV. Why KAI.com: Six Structural Advantages

Advantage 1: Positioning at the “Choke Point” of the Supply Chain Upstream are 300+ fragmented Chinese model vendors lacking pricing benchmarks; downstream are thousands of global AI applications lacking consolidated purchasing power. Bilateral fragmentation + intermediate standardization + instant delivery provide the essential rationale for KAI.com. Advantage 2: Fully Functional Fiat Payment Closed- Loop (Core Barrier) This is not a theoretical design; it is a live, operational production system: Model vendors sell Token futures → Receive USAD/fiat margin → Convert to RMB via KAI’s 11-fiat P2P network → Procure GPU power from Huawei/Alibaba Cloud → Deliver Tokens to buyers. Traditional venues cannot match this: CME lacks RMB paths to clear for Chinese builders; domestic commodity exchanges (CZCE/DCE) lack crypto infrastructure and 24/7 global access; crypto platforms (e.g. Binance) lack institutional model vendor relations and token standardizing frameworks.

Advantage 3: Pricing Power = Data Power (Information Sovereignty) Once KAI.com becomes the home of live Token futures pricing, the value of the ticker board will vastly exceed exchange fees. It allows buyers to compare 300+ vendors instantly, saves sellers from building heavy sales forces, and presents investors and policymakers with the benchmark “inflation/deflation” gauge of the AI sector. Whoever commands the board rules the information sovereignty of the industry.

Advantage 4: Exploiting the “Fragmentation Dividend” of the Chinese Market The US market is an oligopoly (OpenAI, Anthropic, Google, etc.), and oligopolies resist public exchanges because transparent clearing threatens profit margins.

Conversely, China’s 300+ vendor ecosystem creates an intense need for a visible platform to broadcast competitiveness. Here, an exchange is an absolute necessity for suppliers, not an option.

Advantage 5: A Built-In Geopolitical Firewall CME listing Chinese LLM tokens would face crippling CFIUS/OFAC regulatory hurdles; domestic venues lack global settlement frameworks and international client access; offshore crypto venues lack safe RMB legal channels. KAI.com sits uniquely in the blind spot of all three, presenting the sole compliant path forward.

Advantage 6: Self-Reinforcing Network Effects Once pricing power is established, it becomes a one-way flywheel: early vendor listings draw massive buy-side volume, and the resulting ticker effect forces remaining vendors to join or risk total invisibility. Eventually, the KAI Token Index turns into the baseline reference for the industry. This mirrors how CME launched crude futures in 1983; 40 years later, it defines global pricing. The exchange doesn’t produce the commodity; it defines what the price is.

V. Deep Logic: Token Price = The “Interest Rate” of the AI Era

This is a compelling and highly rigorous economic analogy: In the traditional economy, central banks set interest rates, defining the cost of capital, which in turn dictates all investment and production decisions. In a mature AI- driven economy, the token price fundamentally dictates the “cost of intelligence.” The cost of intelligence directly determines whether a business replaces labor with AI and sets the boundary for all application-layer innovations. The global interest rate futures market handles over $500 trillion in nominal value. If tokens serve as the absolute cost-of-intelligence benchmark, token futures are scaling toward an interest- rate-sized financial market.

VI. Summary: The “Strait Gate” of KAI.com

KAI.com is not merely “building an exchange.” It answers the ultimate fundamental question of the AI era: “How much is a token actually worth?” Whoever answers this question and gains market-wide consensus will effectively wield the absolute pricing power over the global AI supply chain. When compute bottlenecks ease, model capabilities align, and 300+ vendors plunge into price wars— market mechanisms, rather than any individual player, will become the final arbiter. KAI.com is designed to be that exact venue.