The Economist.
Hello, Mike Bird here, co-host of Money Talks, our weekly podcast on markets, the economy and business.
Welcome to Editor's Picks.
We've chosen an article from the latest edition of The Economist, which we very much hope you'll enjoy.
It's going to be an absolute nightmare," says an executive at a big American tech company. He is talking
about an emerging problem for businesses that use artificial intelligence. AI agents, bots that can read, interpret
and act, use masses of processing power that have started to run up huge bills. As they proliferate,
the problem will grow. Big companies, the executive points out,
typically use hundreds of software programs. If each of those offers agents, as they probably will,
AI costs could spiral out of control. Budget management is a new worry for AI adopters. Not long ago,
employees were encouraged to binge on the technology. Burning through vast numbers of tokens,
the chunks of text that models process, which are often used as a unit of pricing,
became a badge of honor. Techies dubbed it token-maxing. Companies showed off staff's AI use on internal leaderboards.
Meta's display awarded top users titles like Token Legend. Such incentives partly explain the boom in AI spending.
So does a change in the way enterprises use the technology. Token heavy applications such as reasoning models
and agents are growing more popular. In some cases, agents build their own agents,
sending costs higher still. Ramp, a corporate credit card provider, analyses its client's transaction
data to shed light on their AI use. It reckons their spending has risen 13-fold in the past year. In April,
Uber said that it had spent its annual AI budget in four months. Other firms have similar
problems. One reportedly spent $500 million on AI tokens in a month. Sam Altman,