Tech investor Chamath Palihapitiya warned on Tuesday that AI token spending inside large companies has grown so far out of view that executives could be caught off guard by earnings misses they did not see coming.
The venture capitalist and Social Capital founder made the remarks in an interview with CNBC. “CEOs and the CFOs, in my opinion, probably have no idea how much tokenmaxxing is going on inside of their organizations,” Palihapitiya told CNBC. “I suspect what’ll happen is one day you’re going to have a miss, and EPS will be off by a few pennies, and the CEO will say to the CFO, ‘What happened?'” Tokenmaxxing is the term for corporate policies that push employees toward maximum AI usage, premised on the idea that higher consumption translates into greater productivity
AI vendors typically charge by the token — discrete chunks of data that models consume when generating a response — making token volume a direct driver of enterprise costs, according to Business Insider. Palihapitiya also said that competitive pressure on premium AI models is intensifying. Cheaper alternatives from companies including Meta and Google are now “80 to 95% as good” as leading models for most use cases, he said, and the performance gap between successive AI model releases now resembles the incremental improvements of iPhone generations rather than step-change advances. “I think that you are seeing a convergence; it used to be the case that when a model dropped, it was so superior to everything else,” Palihapitiya said. “You’re like, ‘Oh my God.
We went from kerosene to jet fuel.'” Palihapitiya is also the CEO of 8090, an enterprise software company that announced a $135 million funding round led by Salesforce in June, and a co-host of the “All-In” podcast. He said in March that his own company’s AI spending was trending toward more than $10 million a year. His comments land amid a broad pullback from the tokenmaxxing era, during which some of the largest companies in the world…