00:00 Speaker A
Token maximization, the practice of maximizing the usage of AI tokens, was the latest trend in Silicon Valley until companies picked up the bill.
00:09 Speaker A
Shocked by rising AI costs, many companies are rethinking their AI spending and how they implement artificial intelligence.
00:20 Speaker A
Our next guest says this means changing the way companies spend on AI. Tabs CEO Ali Hussein shares more.
00:27 Speaker A
Tabs is an AI revenue platform that automates billing and collections for finance teams. It also recently raised $55 million in a Series B funding round.
00:36 Speaker A
Ali, thank you so much for being with us. First, I would like to set the scene here. Please describe the white space opportunities you see within this market.
00:47 Ali Hussein
absolutely. So thank you so much for having me. Well, overall, AI is going to fundamentally change pricing as we know it.
00:52 Ali Hussein
And when we look back to when we started the company two and a half years ago, we see that pricing has already started to change. People were moving from flat fees or more predictable pricing models to contracts that opened the door to more usage and volatility.
01:02 Ali Hussein
I think we are at the very beginning of this. Early on, the idea was, let’s try to somehow capture the pass-through of tokens and the actual cost of this AI computing.
01:12 Ali Hussein
However, as the scale becomes clearer, things start to get complicated. Most companies are starting to get used to the cost of these tokens and it’s just a change in mindset among companies as it changes commercially.
01:29 Ali Hussein
And this really sparked us to start thinking about how we reimagine our accounting infrastructure to support this level of uncertainty. It has been an incredible journey for Tubbs to support some of the world’s fastest growing companies, including Cursur, OAC Security, and many others.
01:44 Speaker A
Yes, Cursur is a company that was just acquired by SpaceX and is definitely one to watch.
01:47 Speaker A
But some of our viewers may have heard of an incident at Uber where they were offering tokens to their employees, but they actually had to cut back due to cost.
02:00 Speaker A
So what kind of ramifications does this have for other big tech companies, like Microsoft, Amazon, and Google, who are recognizing this and trying to become more efficient?
02:11 Ali Hussein
I think there are several. I mean, I talk to CFOs every day. I think some companies have readjusted their processes based on what they’ve learned over the past six months and feel more certainty.
02:23 Ali Hussein
Therefore, it is important for them to stay the course. They were just able to budget and plan, and I think it would take a lot longer than it would for Uber.
02:32 Ali Hussein
I think there are some other things that cost a lot of money, especially at the corporate level. They are just trying to control the situation.
02:42 Ali Hussein
I still don’t believe there will be a massive retreat of token custodians, but I think many of these CFOs are now looking for ways to find more certainty.
02:51 Ali Hussein
And what we’re seeing is that a lot of these companies are just sourcing the level of computing they need directly from the lab at the best cost, and they’re just planning on a quarterly basis, rather than thinking they can plan year-round.
03:04 Speaker A
And the opposite case here, if you think about companies like Open AI and Anthropic, they’re now competing to make sure these companies can keep spending on themselves. So what message do you have for companies on this end of the spectrum?
03:18 Ali Hussein
I think one is that we need better tools to provide more transparency to buyers. I often hear stories about CFOs waking up the next morning to find that an engineer has spent $500,000 in tokens.
03:30 Ali Hussein
And I think guardrails will be important. It’s really great transparency that allows for planning. But we know that many research institutions are aiming to go public within the next six to nine months, so we still don’t expect any kind of pricing to fundamentally change at this point.
03:41 Ali Hussein
So I still think they’re going to look for the best pricing and value, especially given their massive scale and management with only two or three options on the market at the moment.
03:51 Ali Hussein
But I think tools that give customers more visibility and control will definitely be the next step.
03:58 Speaker A
And certainly, it seems like we’re still in the early stages of adoption because we’re hearing from these big tech companies, and maybe the mid-sized companies haven’t fully adopted this yet, but at the same time, we’re hearing that California is giving agencies access to Claude.
04:14 Speaker A
What did you think of that announcement and what does it possibly mean for this overall model within the government system going forward?
04:22 Ali Hussein
I think it’s inevitable. I think the technology-advanced companies were obviously the first to introduce it.
04:28 Ali Hussein
I spend about 50% of my time working with providers like you mentioned, nonprofits, government, um, a lot of professional services. They’re in the early innings now.
04:38 Ali Hussein
What’s interesting, what we’re seeing on the tab side is that a lot of companies don’t source their AI directly from Anthropic or Open AI. It comes from a vertical solution that embeds tokens inside.
04:51 Ali Hussein
So I think they’re going to get a lot smarter about how they source contracts with things like Salesforce and ERP. This will give us access to tokens and force us to seriously rethink pricing and how we pay for things that are much more volatile than ever before.
05:08 Speaker A
Ali, that’s great insight. Thank you very much. Thank you for taking the time to explore how this early innings will ultimately play out.
05:14 Speaker A
Thank you very much.
05:16 Ali Hussein
of course. Thank you for having me. be careful.
