Tech leaders are waking up to massive, unexpected AI bills. Why? The industry has fallen for the &#x27;reasoning trap&#x27;: paying models to rethink basic, repeatable tasks from scratch. Pegasystems CEO Alan Trefler joins David Savage to expose the &quot;token-eating&quot; agents causing boardroom budget shock. We unpack why standardising your AI &quot;recipe&quot; is the only way to scale without breaking the bank, and why token-maxxing is a flawed strategy. WhatsApp us your comments and questions on +447392087344 Tech Talks is powered by Harvey Nash, the leading global provider of technology and talent solutions. Click here to learn more about our services. The music on Tech Talks is created by London artist Lemzi.

Tokenomics: The Hidden Invoice Shock That's Destroying Tech Budgets

Tech Talks

# Full Transcript

**Podcast:** Tech Talks

## Participants

- **David Savage** (Harvey Nash)
- **Sam** (None)
- **Alan Treffler** (Pegasystems)

## Transcript

Jensen Wang, your brilliant guy, head of Nvidia, about 10 weeks ago when this craziness all began to break, he actually said that if you've got a software engineer who's not using a quarter of a million dollars worth of tokens in a year, then you're probably wasting them. And in addition to that being a somewhat self-serving comment, I would also say that would be nuts.

Welcome to Tech Talks brought to you by Harvey Nash and hosted by me, David Savage. On today's show my guest is Alan Treplow-Pega and we are talking all about the token-opalypse, the unsustainable cost of AI.

Look, next week's podcast episodes, we have three to bring you from OutSystems One conference with Woodson Martin, their CEO, with Lucy Donaldson, who's one of their customers, speaking on stage, CIO of Globus Travel, and Luis Blando, who is their Chief Product and Technology Officer. And one of the themes that came through the whole conference was the escalating cost in AI. It's a bit of a trailer, that's what we've got for you coming next week. We talk about that and lots of other things.

But before we get to that, I thought it would be good to sit down with someone and go, is AI really an unsustainable cost? Sam, we've just, before I hit record, we've been talking all about AI tokens because it was something that you weren't really cool beforehand. Crash course.

Crash course in AI tokens, yeah. Obviously we've spoken about the cost in quotations of AI, whatever that means, a lot environmentally, financially, and in all the other ways. I wasn't aware of tokens. This is a reality that I knew it was bad, but yeah, I didn't know about this aspect of it.

Well, look, we're all familiar with the idea that AI costs money. You want to have a better model, it's going to cost you more money, your subscription basis, etc. The idea is that a token basically is the way that AI sees words, for want of a better way of describing it. Like in English, roughly, one token equates to about 0.75% of a word. English is quite a straightforward, direct language.

You think about some other languages, it costs you more to use AI because it's less efficient than English. Which is just an unfortunate reality if you are not using it. You can't avoid that, right? English being quite curt and precise in that regard. Yeah. Okay. Problem is, for a lot of companies, overnight their bills exploded because better AI models came along.

And the same prompts that you were putting in, and you used tokens getting an input, and then you used tokens getting an output, was costing you more because the model got better. So it started to think, and there was this loop going on internally of it giving you a better answer. And all of a sudden, hey, here's your bill. And it's gone up 3%, 10%. Yeah, absolutely. What the hell's going on? Boardroom, shock.

Li...

Tokenomics: The Hidden Invoice Shock That's Destroying Tech Budgets

Transcript

Built for investment professionals

Every day you wait, your competitors are finding
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Tokenomics: The Hidden Invoice Shock That's Destroying Tech Budgets

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.