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Will 'token burn' burn businesses and investors?

ended 07. May 2026

The one problem with AI agents, which is largely overlooked in all the euphoria (and users being heavily subsidised by VC money), is that they cost a huge amount of money to be powered. Each prompt, each word is a token and each token costs money and these tokens are being burnt, fast, especially as people and businesses too often squander their tokens generating AI slop (partly understandable as it's all very new and exciting). But one day these token are going to need paying for, and the bill will be big. Very big. Businesses are not alive to the fact that the more they integrate AI into their systems, the more they will be shelling out downstream, while people investing in AI are not aware that at some point in the not-too-distant future, AI companies who can't get their customers to pay are at risk of going pop. Perhaps spectacularly so. In short, businesses and investors are at risk of being burned by token burn, but too few are aware of it. How big an issue do you think token burn has the potential to be for firms integrating AI into their systems, especially inefficiently? And how big an issue could this be for investors going overweight AI firms in their portfolios, unaware of the underlying economics and only reading the headlines about the transformative potential of AI? In summary, how badly could businesses and investors get burnt?

4 responses from the Newspage community

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Mitali DeypurkaysthaVerified
AI Governance Strategist & CMO at AISensa
A few £20 AI subscriptions could become £2,000 business black holes once the subsidy smoke clears. Right now, firms are treating AI like NHS dentistry: manageable while the real costs are heavily cushioned, but a nasty shock when the true bill finally lands, much like pet parents discovering a simple animal dental job can suddenly cost hundreds because it is not subsidised. Businesses may think they are cutting wage bills, but many are quietly swapping them for meter bills that could rocket with every click, prompt and piece of AI slop once the subsidies disappear. Investors are betting firms will become so hooked on AI that ripping it out feels even more painful than paying the soaring costs, much like devoted pet parents will do anything for their animal in distress. The danger is that many businesses may already be walking into a trap without realising how expensive the escape route could become.
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Katrina YoungVerified
Futurist | Chief Technology Officer CTO/CDO Ethical AI & Digital Transformation Strategist at KYC Digital
Token burn is less a procurement problem and more a governance problem.Most organisations deploying AI agents still do not fully understand what automated workflows cost to run at scale.Tokens are consumed operationally while budgets are still being viewed through flat subscription thinking.That disconnect is where financial surprises become operational problems.The real question is not whether AI is useful.It is whether businesses have properly modelled the long-term infrastructure economics of embedding it into everyday operations.Many still have not.
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Colette MasonVerified
AI Ethics Consultant at Clever Clogs AI
A £160 AI subscription can consume £3,500 in actual compute, a 25x subsidy. Raw electricity alone runs 15 to 20% of API pricing, meaning some users cost providers more in power than they pay in fees, before GPUs, training or staff are counted.

That subsidy is ending. For example, Microsoft's GitHub Copilot paused all individual signups on April 20th, not to increase revenue but because they ran out of capacity. Microsoft is shifting to token-based billing because charging per message made as much sense as a supermarket charging per item in your trolley whether you picked up crisps or a widescreen TV.

Even if every business paid full price for tokens, there are not enough chips to serve them. The three manufacturers investing $50bn to expand will not produce volume output until 2028. Microsoft, Google, Meta and Amazon have forward-ordered most of Nvidia's allocation through 2027, crowding out everyone else.

When tokens cost 25x as much will people still want AI embedded everywhere?
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Rohit Parmar-MistryVerified
Founder at Pattrn Data
Token burn is the bit of the AI agent story that gets hidden behind the demo. Every impressive autonomous workflow still has a meter running underneath it, and many users have not yet seen the real bill because venture money is softening the landing.

That matters for businesses and investors because an agent that looks cheap in a subsidised market may become expensive once usage scales and pricing normalises. The risk is not just technical failure. It is building operations around a cost base nobody has properly modelled.

The sensible question is not whether agents are useful. Some clearly will be. It is whether the value of each task is greater than the compute, supervision and error-management cost behind it. If that maths is vague, token burn becomes margin burn. For this brief, the useful answer is evidence people can check, limits they understand, and a clear route to challenge a poor outcome.