Wharton's Ethan Mollick says AI API tokens transitioned from an overlooked expense to an essential development requirement in one year
OpenClaw's creator reportedly spends $1 million monthly on tokens.
Most companies only have very crude understanding of token usage right now, so they veer from focusing on adoption (“everyone should use as many tokens as possible”) to cost control (“can we just use local models?”) depending on the moment and manager. This is all very new.
Ethan Mollick@emollickThe fact that tokens went from something no one even put in a budget line a year ago to an absolute requirement for coding now is the cause of handwringing, not that AI is not turning out to be useful No one knows who should get tokens, how much they should get & how to control
Do you want your best engineers to use the most tokens? Your worst? Can you even figure that out? Are there some use cases to prioritize? Will your other engineers be resentful that they can’t burn as many tokens? How do you deal with competing projects and constraints?
Ethan Mollick@emollickMost companies only have very crude understanding of token usage right now, so they veer from focusing on adoption (“everyone should use as many tokens as possible”) to cost control (“can we just use local models?”) depending on the moment and manager. This is all very new.
I have heard from quite a few large organizations that blew through their entire token budget in the first couple months of the year. There aren't even good processes for thinking through how token costs will change over time.
Ethan Mollick@emollickDo you want your best engineers to use the most tokens? Your worst? Can you even figure that out? Are there some use cases to prioritize? Will your other engineers be resentful that they can’t burn as many tokens? How do you deal with competing projects and constraints?
Kinda crazy how fast it’s going
openclaw guy spent $1 mil a month in tokens, meta’s top eng spent half a mil
$200/mo does go far, but it’s also a high bar for anyone not already on a high US tech salary
But big tech businesses are throwing money at it. Genuinely near unlimited budgets.
Opportunity is huge, and risk of spending low and losing is much bigger than risk of spending too much to win. Meta & Microsoft both missed mobile phones and lost billions of dollars. So they will throw everything at the current opportunity.
Ethan Mollick@emollickThe fact that tokens went from something no one even put in a budget line a year ago to an absolute requirement for coding now is the cause of handwringing, not that AI is not turning out to be useful No one knows who should get tokens, how much they should get & how to control