Especially amongst their customers. Who are now asking the next logical question: “What are we getting?” for spending all that money on a la carte AI Compute for our developers and employees.
All this bears on the mega-AI IPOs ahead this year. And is thus the Bigger Picture to discuss this Sunday.
“Corporate leaders are starting to question whether soaring AI spending is delivering meaningful returns.”
“Why it matters: Companies that rushed to embrace AI are now confronting ballooning IT costs, uncertain productivity gains and growing employee skepticism.”
“Driving the news: Microsoft canceled most of its Claude Code licenses, in part over costs, according to The Verge, and Uber’s COO said AI costs are getting “harder to justify.”
“An AI consultant tells Axios one of their clients recently spent half a billion dollars in a single month after failing to put usage limits on Claude licenses for employees.”
“Companies are citing AI’s ability to automate jobs as a cause for layoffs, though Anuj Kapur, CEO of CloudBees, told Axios that workforce cuts may simply be “the only lever they can pull” to offset their AI bills.”
“Consumer sentiment around AI is also nosediving, and employees are rebelling against the use of the technology at work.”
“What they’re saying: The enterprise is undergoing a “healthy swing” away from AI overuse — or “tokenmaxxing,” the push to burn as many AI tokens as possible — Ali Ansari, CEO of model training firm Micro1, told Axios.”
“Ansari hopes this correction will push companies toward more efficient AI use.”
“While the market views these tools asworking equally well across the enterprise, Ansari says “the reality of AI right now is that it only works for coding.”
“That disconnect can drive up IT bills without leading to high return on investment in agents, he said.”
The case for AI ‘product market fit’ (PMF) beyond AI coding has still a ways to go to be built to the same standards of certainty. Beyond the AI Coding gold discovered by Anthropic and OpenAI in particular.
Then there’s the issue of measuring this PMF and long-term utility. Not to mention the Productivity gains from AI in terms of the output.
“Friction point: Corporate AI adoption is running into four unique problems.”
“Use cases: “Most people default to automating tasks they dislike rather than tasks most valuable to the company,” Sophia Velastegui, CEO of Velastegui Ventures and former chief AI officer at Microsoft, told Axios. Instead, they should focus on using AI to drive revenue.”
“Costs: One CTO told Axios that employees were using AI models to check the weather. That gets expensive fast: Enterprise AI plans are not truly “all you can eat,” and even simple chatbot queries can carry heavy token costs.”
“Humans: We are the bottleneck to more efficient adoption, as we’re still catching up on AI. Leadership isn’t always helping: Throwing AI licenses at the wall and seeing what sticks (or what Velastegui calls the “thousand flowers bloom” approach) isn’t leading to tangible returns, she said.”
“Data: When enterprises are hesitant to give AI agents unfettered access to proprietary data, those agents become less effective, Josh Pantony, CEO of Boosted.ai, which focuses on AI tools for finance, told Axios.”
“What we’re watching: Whether companies get more disciplined about AI use. Or overcorrect and clamp down.”
It’s clear that we’ve barely starting measuring on AI compute utility and productivity beyond AI Coding. And that’s a Bigger Picture worth keeping in mind thus far in the AI Tech Wave.
Especially as we evaluate multiple trillion dollar IPOs in the coming months. Stay tuned.
(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here)
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