The cost of tokens is now competing with the cost of headcount.

“You have to raise a lot more money on a per-headcount basis,” Henry Ward, who runs Silicon Valley financial-software provider Carta, said at Semafor World Economy in Washington, DC. “I don’t see any end to that in sight.”

Tech executives like Nvidia’s Jensen Huang have suggested that the more companies spend on AI, the more money they will make. But the growing cost of tokens is a line item that CFOs are having trouble planning for. Several executives in Washington, DC, last week said they’re grappling with that uncertainty.

“The unit costs are going down, but the aggregate costs are going up, and companies don’t like when something is unpredictable on cost,” said Charles Phillips, co-founder of private equity firm Recognize. Kunal Kapoor, CEO of Morningstar, added that subscription models “have endured for a long time because there’s value in certainty.”

ICONIQ Capital founding partner Divesh Makan, whose investment firm recently led one of Anthropic’s funding rounds, called free AI models “the gateway drug” to paid versions, adding that his employees keep asking for more tokens.

“The conversation we’re having is, ‘What is the amount we should be spending, and how do we measure ROI?’” he said. “Are you just buying holidays and checking the weather in Tokyo, or are you doing something productive with these tokens?”