OpenAI CEO Sam Altman admits AI token costs are becoming 'an issue'
OpenAI CEO Sam Altman acknowledged during an interview that AI token costs have become a major concern for clients, as companies overspend and seek efficiency. Despite growing usage, cost reductions are needed to sustain the trend.
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OpenAI CEO Sam Altman has said in an interview that companies are now concerned about the growing costs of AI use. Speaking during the Intelligence at Work event, he said this is the first time that OpenAI’s clients raised the issue and that the startup is now looking for ways to make its models more efficient.
“People are really saying, you know, it’s kind of a meme now, but ‘My company spent my entire 2026 budget in Q1. Can you make this more efficient?’” Altman said on stage. “We are continuing to push on that more with models. I think we’ll have a lot of ways we can help people get more value for less spend. But that went from, at the beginning of this year, an issue that never came up (people were totally happy with the amount they were spending) to, all of a sudden, a huge issue.”
There have recently been a lot of stories of companies getting massive AI bills as they experiment with “tokenmaxxing.” A few company leaders believed that AI use would increase the productivity of their workers, thus increasing revenue. Nvidia CEO Jensen Huang famously said that his engineers should use AI tokens that are worth at least half their annual salary, or else he'd be “deeply alarmed.” We also saw another example with OpenClaw creator Peter Steinberger, whose team spent $1.3 million on OpenAI API tokens in a month, totaling 603 billion tokens.
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However, it seems that this move is starting to backfire on some companies. Amazon employees admitted that they were using AI agents for unnecessary tasks just to stay on the internal AI leaderboard, while Microsoft has reportedly cut back on Claude Code licenses due to increased costs. Even the Uber CEO admitted that there is currently no link yet between going all-out on AI and delivering successful products.
Despite that, Altman projects that AI token usage will continue to increase. He said that six-and-a-half years ago, the top token spender at the startup used 100,000 tokens a month — today, that is the global per capita average token usage, and that OpenAI’s token leader uses about 100 billion a month. The OpenAI chief also admitted, to his own embarrassment, that someone else uses even more. So, if token usage were to grow linearly, then he would expect the global per capita token usage to hit 100 billion monthly.
However, this is likely under the assumption that token prices will decrease faster compared to the increase in the number of tokens used across the globe. Because, at the moment, some are finding that it’s now more expensive to run AI models compared with hiring people.
Jevons paradox says that the cheaper a particular resource becomes, the more people will use it, and we’re seeing this with AI. But as agentic AI becomes more popular and sophisticated, the number of tokens these systems use has been increasing exponentially, seemingly outpacing the efficiency gains that AI labs have been making on training and inference.
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So if multiple companies are blowing their entire token budget in Q1, does that mean these AI startups profitable now?
Or are they still sucking off of tax payer money to stay afloat?
How’re they using tax payer money? My guess would be they’re just burning through their investor’s money.
their investors probably knew what they were getting into when they invested so too bad for them.
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How’re they using tax payer money? My guess would be they’re just burning through their investor’s money.
their investors probably knew what they were getting into when they invested so too bad for them.
Sure, until their IPOs where the initial investors get out and leave retail investors holding the bag for an unprofitable technology.
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How’re they using tax payer money? My guess would be they’re just burning through their investor’s money.
their investors probably knew what they were getting into when they invested so too bad for them.
US Military uses OpenAI, which is US tax payer funded.
Startup tech companies, AI included, can apply for federal grant programs and tax credits in various countries. For US, there is SBIR. Canada has the AI compute access fund. China subsidizes quite a few, judging by how often American AI companies complain about it.
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