Instagram CEO Adam Mosseri weighed in on the ongoing debate over the rising costs of artificial intelligence (AI). He shared how his department was able to reduce bloated AI budgets by cutting back on wasteful early-stage experiments. Mosseri revealed on a recent episode of “Lenny’s Podcast” that reining in the department’s initial overspending was actually quite easy. “We were able to keep costs down a little bit by not doing some stupid things that we were doing,” Mosseri told host Lenny Rachitzky (via Business Insider). He did not mention specific projects that were canceled, but said, “It’s not that difficult to build a token incinerator.”
Death of “Tokenmaxxing”
Mosseri’s comments are indicative of a cultural shift in Silicon Valley. In the early waves of the AI boom, companies heavily participated in a trend known as “tokenmaxxing,” often using internal leaderboards to track and incentivize massive AI data consumption. In the AI model, tokens are the basic unit of data used to process information, and top technology providers charge companies based on the number of tokens consumed.Meta, the parent company of Instagram, has historically been reported to be one of the largest companies using these token leaderboards. When asked about them now, Mosseri flatly calls the practices “a terrible idea.”Businesses around the world are currently facing a sharp increase in technology-related bills. This is being driven by widespread adoption by employees and the rise of “agent AI” tools that require far more processing power. Uber Chief Operating Officer Andrew MacDonald recently made headlines for sounding a similar alarm, questioning whether Uber’s massive investment in AI is actually producing meaningful business results.Mosseri views AI tokens as standard enterprise resources that need to be budgeted alongside physical hardware such as graphics cards (GPUs), server storage, RAM, and traditional payroll. In fact, he predicts that in the near future, an employee’s data usage could rival their actual salary.“I think you can imagine that, at least within the next year or two, the burn rate for good engineers could be on par with salaries and labor costs,” Mosseri warned.To prevent budgets from ballooning out of control, Instagram’s chief suggested that companies will eventually need to impose strict data caps on employees, which will be distributed based on employees’ proven ability to generate a positive return on investment.
