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AI Token Costs Are Spiraling as Companies Scramble for Control

3 min read
adoption and increasingly autonomous agents have driven token consumption higher and higher. Companies that gorged themselves in early 2025 on all-you-can-eat subscriptions are now scrambling to understand where their money is going, pull back spending, and figure out whether they can salvage some ROI from the wreckage of their budgets. Meanwhile, a market is forming to meet them there. Startups, established vendors, and a new standards body are all racing to give companies the tools and language to track what they spend. “Six months ago, I would have a conversation with a customer and it would be all about ‘What can it do? Is it good enough?’” Alexander Embiricos, OpenAI’s head of enterprise, told TechCrunch at an event in New York City this week. “Our conversations are never about that now. Now the conversations are about, ‘hey, we’re spending so much. What visibility do you have? What auditability do you have? What token controls do you have? What is the efficiency of your models?’” It’s against this backdrop that the Linux Foundation this week unveiled plans for the Tokenomics Foundation, a new standards body that aims to instill the same cost discipline around AI tokens that FinOps did for cloud spend. “In April and May, I started hearing from companies: ‘Oh my god, we are 3x over our entire 2026 token budget and it’s only April,’” J.R. Storment, executive director of the FinOps Foundation, a project under the Linux Foundation, told TechCrunch. “We started hearing existential crises, and the whole conversation shifted from tokenmaxxing and ‘go fast’ to ‘we need guardrails, how do we control this?’” The cries heard round the tech world followed fervent demands from CEOs pushing their teams to use the best models and move fast, costs be damned. New models released in November like Anthropic’s Claude Opus 4.5, OpenAI’s GPT-5.1, and Google’s Gemini 3 Pro brought significant improvements to agentic tools, which have multiplied consumption. It’s how one company reportedly found itself with a $500 million Claude bill after forgetting to set usage limits for employees. “It’s like the crack-cocaine epidemic,” said Chris Reed, senior director of IT finance at Priceline, noting the company had begun placing token limits on certain groups. “They let you try it to get you hooked on it, and now you’re kind of beholden to it.” Vitaly Gordon, CEO of engineering operations platform Faros AI, said he recently spoke to a CTO who told him: “One of my engineers spent $40,000 on tokens last month, and I genuinely don’t know whether I should stop him or should I go and tell everyone else to be like him.“ A March survey by Faros found that among 20,000 developers, output was rising, but so were bugs and rewrites. Jellyfish, an engineering management platform, similarly found engineers who used the most tokens were about twice as productive as those who used AI less, but they spent 10x the number of tokens to get there. Nicholas Arcolano, head of research at Jellyfish, told TechCrunch via email that expenditure on AI is exploding in large part due to agentic features, with per-developer consumption rising about 18.6x in nine months. All in all, these stats make the productivity case murkier than the spending suggests. “Whether extreme spend pays off comes down to the ultimate business value of shipped code (e.g. revenue), which most companies still can’t measure,” Arcolano said. At least some of that measurement issue is the sheer scale at which AI is being used today. “Tracking cloud costs is a hundreds-of-millions-of-rows-a-month data problem,” Storment said. “Tracking token costs is a trillions-of-rows-a-month data problem. You can’t just stick that into whatever spreadsheet or even basic tool. You’ve got to fundamentally rethink your tooling, your specs and your accounting systems to do that.” At Priceline, Reed is already seeing discrepancies. He noted issues between a vendor’s reported usage and Priceline’s internal data. “I started my career in telecom expense management, and I’m seeing all the same parallels, from telecom to cloud to AI,” he said. “Anytime you introduce something new, it’s ripe for billing errors and audit and optimization opportunities.” A market is beginning to form around this problem. There are the pure-play companies, like Pay-i, which tracks, measures, and optimizes the costs and performance of GenAI investments. Paid, meanwhile, lets developers track costs, measure usage, and bill users based on actual value rather than subscription fees. Then there are companies like Jellyfish, Waydev, and Faros AI, which all provide AI agent monitoring to prove the ROI of developer tools. Storment says most of the 180 vendors within the FinOps Foundation are leaning toward this space. Companies with existing distribution are also adding new features to capitalize on this new market. Ramp has recently moved into AI spend management; Datadog and New Relic have tacked on services like cloud cost management, token-level observability, and GPU monitoring. At the FinOps X conference next week, AWS is expected to introduce new financial management features geared toward enterprise AI spending. Tiffany Luck, a partner at NEA, thinks token efficiency and observability will likely be added in at the “harness or app layer.” She pointed to Factory, a startup that makes AI agents for enterprises, which this week launched a model router that automatically picks the right model for every task. Gordon expects frontier labs and other model providers to adopt OpenRouter-style optimization to drive queries to the cheapest models — a trend already showing up on enterprise Claude bills. “The financial report for how much you spend on Anthropic, even if you call the Opus model, some of the spend will be on Sonnet or Haiku, because they are smart enough to do it,” Gordon said. “I think this will become more and more of a thing.” But all these tools are being built without a common language or shared definitions for how much a token costs, what it produces, and how to compare spend across vendors. That’s where the Tokenomics Foundation hopes to prove useful. The Foundation is building a canonical definition and framework for “tokenomics;” open standards, specifications and metrics for AI token usage and billing; as well as new metrics for AI economics, like cost-per-intelligence or tokens-per-watt. It also plans to define metrics across token factory effectiveness and consumption efficiency. The group is planning a formal launch in July, and is about to announce more members at the FinOps X conference next week. “Token economics is fundamentally more abstract and opaque than anything we’ve managed at this scale before,” Nishant Gupta, chief availability officer at Salesforce, said in a statement. “It requires a different operational muscle than the one the industry built for cloud.” That said, Goldman Sachs projects global token usage to multiply by 24 times by 2030. The companies already over budget need solutions now, and the foundation’s first deliverable is still months away. “Maybe we created a steam engine, but we still haven’t figured out the assembly line,” said Gordon. According to Arcolano, the smart move is broad, moderate adoption. “The best ROI comes from moving the broad middle from low to moderate usage, not pushing heavy users higher,” he said. Russell Brandom and Tim Fernholz contributed to this reporting. AI Token Costs Are Spiraling as Companies Scramble for Control

The artificial intelligence boom promised greater productivity, faster software development, and smarter business operations. But for many companies, another reality is starting to emerge: AI is becoming extremely expensive.

Across the tech industry, businesses are facing rapidly growing AI bills as employee usage, autonomous agents, and advanced models consume far more tokens than expected. What started as excitement around AI adoption has quickly turned into a race to understand costs, enforce spending controls, and prove a return on investment.

According to reports, companies that embraced unlimited AI subscriptions in early 2025 are now struggling to manage soaring expenses. Uber reportedly exhausted its entire 2026 AI coding budget by April, while Microsoft revoked developers’ access to Claude Code licenses only months after introducing them. Meanwhile, a Priceline employee revealed that a routine Cursor contract renewal returned with costs four to five times higher than before.

AI Usage Explodes Despite Falling Token Prices

Although token prices have declined over time, total spending continues to climb because companies are using AI tools much more frequently.

Newer models such as Anthropic’s Claude Opus 4.5, OpenAI’s GPT-5.1, and Google’s Gemini 3 Pro have dramatically improved autonomous AI capabilities. These agentic systems can perform increasingly complex tasks, but they also consume significantly more tokens.

The result is a sharp rise in overall usage.

Alexander Embiricos, OpenAI’s Head of Enterprise, said customer conversations have shifted completely in recent months.

Instead of asking what AI can do, enterprise customers are now focused on visibility, auditability, token controls, model efficiency, and spending management.

The concerns have become so widespread that the Linux Foundation recently announced plans for the Tokenomics Foundation, a new standards organization focused on helping companies track and manage AI token spending.

Companies Blow Through Budgets

J.R. Storment, Executive Director of the FinOps Foundation, said many organizations started reporting serious budget problems earlier this year.

According to Storment, several companies were already three times over their entire 2026 token budgets by April.

The shift represents a dramatic change in mindset. Only months ago, businesses were encouraged to move quickly and adopt AI aggressively. Now, many are searching for guardrails to prevent runaway spending.

One company reportedly accumulated a staggering $500 million Claude bill after failing to establish usage limits for employees.

Priceline has already started imposing token limits on certain teams to control costs.

Chris Reed, Senior Director of IT Finance at Priceline, compared the situation to industries that previously faced uncontrolled spending on new technologies, noting that organizations often become dependent before fully understanding the financial impact.

Productivity Gains Don’t Always Match Spending

While AI tools are boosting developer output, measuring their true business value remains challenging.

Research from engineering platform Faros AI found that developer productivity increased alongside AI usage, but bugs and code rewrites also rose.

Jellyfish reported that developers using the most AI tools were roughly twice as productive as lower-usage peers. However, those same developers consumed nearly ten times more tokens.

Nicholas Arcolano, Head of Research at Jellyfish, said determining whether extreme AI spending is worthwhile ultimately depends on business outcomes such as revenue generation—something many companies still struggle to measure accurately.

A New Market Emerges Around AI Cost Management

As concerns grow, a new industry focused on AI spending management is rapidly taking shape.

Companies such as Pay-i help businesses track and optimize generative AI investments, while Paid enables developers to monitor usage and bill customers based on actual value delivered.

Other firms including Jellyfish, Waydev, and Faros AI are offering AI monitoring tools designed to measure productivity and prove return on investment.

Established technology providers are also moving into the space. Ramp has expanded into AI spend management, while Datadog and New Relic have introduced token-level observability, cloud cost controls, and GPU monitoring solutions.

At the same time, the upcoming Tokenomics Foundation aims to create common standards for measuring AI usage, billing, and efficiency. The organization plans to develop metrics such as cost-per-intelligence, tokens-per-watt, and token consumption efficiency.

The Next Challenge for Enterprise AI

Industry experts believe AI spending will continue climbing rapidly. Goldman Sachs projects global token usage could increase 24-fold by 2030.

However, many companies need answers long before then.

As AI adoption accelerates across industries, organizations are discovering that managing token costs may become just as important as deploying the technology itself. The challenge is no longer whether AI works—it is whether businesses can afford to scale it efficiently.

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