The list of CEOs asking their employees to reduce their token usage is now growing almost as fast as the list of ones telling employees to use as many tokens as possible last year. And the reason, as usual, is money.
The era of tokenmaxxing and AI leaderboards, where employers have incentivized developers to use as much AI as possible without worrying about the results, is over. The promised ROI never arrived, instead the costs kept climbing higher and higher as OpenAI and Anthropic, who have been the principal beneficiaries of the spend-at-all-costs mentality, started raising their prices to try to make their financials look somewhat sane. They failed.
Now, as they gear up for potentially historic IPOs (both filed confidentially in early June), they're rushing to cash in on valuations approaching $1 trillion before it all comes crashing down. But they may be too late, as it sounds like they underestimated how bad the ROI calculations wout turn out and how unsticky their products would ultimately be. Turns out the novel autocomplete machine isn't worth millions (!!!) of dollars a month.
Some companies are turning to model routing, which is also bad news for Anthropic and ChatGPT because it shows just how commoditized the technology has become beyond the user interface – the actual model used can be whoever is cheaper for most tasks.
OpenAI is trying to backpedal by launching updated controls for enterprises, allowing administrators to break down credit spend across the workplace, set usage limits and give employees visibility into their available budgets. Anthropic rolled out a series of controls that allow customers to provision users, view analytics and set spending limits at the organization and individual level. The fact that this wasn't already standard just goes to show the hubris of their go-to-market strategy – not capping user spend? Not even giving visibility into it?
But the real reason to panic isn't customers, it's the money. Microsoft was once an OpenAI partner and is now one of its fiercest competitors, and competing against your biggest financial backers hasn't historically been a great strategy. With income from ROI-driven customers drying up, and investors not really wanting to invest against themselves, IPO is the only way to keep growing.
And I hope it's the end of tokenmaxxing for good.