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Venture capitalist Chamath Palihapitiya expressed concern about the rising cost of artificial intelligence.
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Palihapitiya said his software startup’s AI costs have tripled since November.
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Costs go up every three months, Palihapitiya said, “but my income doesn’t.”
Venture capitalist Chamath Palihapitiya said he couldn’t believe how much his software startup was investing in artificial intelligence.
“Our costs have more than tripled since Nov. 25,” Palihapitiya said on an episode of the “All-In Podcast” released Friday. “The cost of inference that we pay to AWS is huge, and between the cost of Cursor and the cost of Anthropic, we’re just spending millions of dollars.”
Palihapitiya said that the goal of 8090 he founded is to “replace/rewrite all legacy software in the world” and currently spends $10 million per year on artificial intelligence costs. His concerns about ballooning bills come as the tech industry continues to digest how artificial intelligence can disrupt mature fields like software engineering.
The biggest concern expressed by Palihapitiya is that while the cost of AI continues to rise, 8090 revenue is not growing at the same rate.
“The problem is my costs triple every three months,” he said. “My income is not.”
Palihapitiya said on X that the current system is partially subsidized by large venture capital firms, which remain among the largest backers of artificial intelligence companies like OpenAI and Anthropic. Some in the tech community question the sustainability of the current approach, comparing it to Uber’s rides starting out cheap and then increasing in cost over time.
“Thank you to the venture capital firms who will fund this unlimited token consumption with huge investments,” he wrote.
Palihapitiya points to Cursor, a popular AI coding tool, as one of 8090’s largest sources of AI cost. He said Anthropic’s Claude Code is more cost-effective.
“We need to migrate Cursor,” he wrote on X. “It’s too expensive compared to Claude Code. The latter is equivalent and if you go with the Pro plan you eliminate the huge Cursor token consumption fee.”
Concerns about the rising costs of using artificial intelligence continue to rise. OpenCode founder Dax Raad recently said that CFOs are starting to realize the cost of AI bills.
Raad wrote on
Palihapitiya said he suspects part of the 8090’s AI bill may be due to the Ralph loop, a nickname for a technique that essentially keeps feeding the same cues back to the AI model until the problem is solved. This method is named after “The Simpsons” character Ralph Wiggum, a beloved goofball who was fiercely persistent.
