The Morning Download: Corporate America Is Starting to Ration AI

Good morning. As costs rise, companies are looking to put more limits on the usage of AI tokens, the basic unit of measurement for data that has been processed.

Google now processes over 3.2 quadrillion tokens a month, seven times as much as a year ago. To put that in perspective, consider that 100 tokens is equivalent to 75 words, according to Microsoft.

AI model providers seek to balance supply and demand, and soaring spending on AI computing tokens is prompting leadership at big companies to ration AI use and seek cheaper tools, The Wall Street Journal’s Bradley Olson reports. 

Top technical executives at Uber Technologies, Meta Platforms, Microsoft, Salesforce, DoorDash and other companies have all talked about new efforts to ensure AI use contributes to productivity or have taken steps to reduce the availability of some tools for certain employees, according to the WSJ. Highlights from the story:

Just a few months ago, the prevailing sentiment around AI use at many big companies was the more, the better. All-you-can-eat subscriptions amounted to a subsidy by the model-makers, which often lost money on the intensive activity of power users. Exhorted to embrace the wave of change, employees at some companies engaged in tokenmaxxing, or using as much computing as possible in order to be seen as AI-forward—a practice that continued even as the model companies shifted to usage-based pricing.

“It has been great to let people experiment but now we have too many overlapping tools,” Meta Chief Technology Officer Andrew Bosworth said in an April memo. “Nobody should be using AI tools just for the sake of using them. All motion is not progress and token usage alone is not a measure of impact of any kind.”

Is your company putting in place productivity-driven controls around the use of AI? Let us know.

How a Black Friday “flop” helped Lowe’s modernize its tech for AI. Lowe's is taking advantage of AI today, but leadership laid the foundations for that capability years ago. 

Lowe’s Chief Digital and Information Officer Seemantini Godbole said she was just five or six days into the job in November of 2018 when the company experienced a Black Friday “flop.”

The result of that experience, she said, was a recognition that, “We need to fix all this.” That led to the ambitious goal of updating the Lowe’s technology stack in the next 90 days, she said. The team also committed to moving its “shopping experience” to Google’s cloud platform within a year, Godbole said.

But in the early days, there was a sense that “we are taking on too much and we are doing too much,” Godbole said. “We probably were. But we needed to do that.”

When the pandemic hit, Godbole had to decide how to manage the company’s ongoing tech transformation while staff were working remotely. The answer was to go faster—setting up initiatives like curbside pickup in six weeks, she said.

Lowe’s also hired about 2,000 new workers in Godbole’s first three years to help with the company’s tech modernization, she added.

Today, the company has an API-based architecture that works well with Google Cloud. Now, as the AI era is in full swing, Godbole said the company’s prior tech modernization work has helped prepare it for the moment. “If we had not done all this digital transformation, we would have been mired in the complexities.”

— Belle Lin

Memory is now more valuable than oil, says WSJ Heard on the Street's Dan Gallagher.

The world’s three largest memory-chip makers—Samsung Electronics, SK Hynix and Micron Technology —now carry market capitalizations of more than $1 trillion each. That puts them about 22% above the combined market cap of the world’s three most valuable oil companies, even with Saudi Aramco weighing in on its own at nearly $1.8 trillion.

• Anthropic closed a funding round at a $965 billion valuation, surging past OpenAI, the WSJ reports. The company’s valuation growth is the fastest in venture-capital history, according to PitchBook Data. Anthropic reached its latest valuation roughly 3 years and 2 months after launching its first product, per PitchBook. Anthropic on Thursday also unveiled Claude Opus 4.8, its latest flagship model. 

• An internal leaderboard used to track Amazon workers on their AI usage has been shut down. Some employees gamed the system by assigning AI agents to perform unnecessary tasks just to boost their scores, FT reports.

• Dell shares soared nearly 40% in after-hours trading Thursday after the computer hardware maker reported red-hot growth in AI servers for data centers and details emerged about a $9.7 billion contract with the U.S. military, the WSJ reports.

• IBM in a securities filing Thursday indicated that it planned to invest $10 billion in quantum research and manufacturing over the next five years, as it prepares to release a fault-tolerant quantum computer by 2029, Barron’s reports.

• At Meta Platforms’s annual shareholders meeting Wednesday CEO Mark Zuckerberg said that the company could one day rent out some of its computing resources, CNBC reports. The company plans up to $145 billion in capital expenditures this year, largely to build and supply AI data centers in its pursuit of personal superintelligence for its 3.5 billion daily users, the WSJ reported earlier.

• Wix, an Israel-based web development company, said Thursday that it plans to cut 20% of its workforce, citing exchange rates but also fast rising AI capabilities. Wix had 5,277 employees at the end of the first quarter, CNBC reports.

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