Palantir has become the latest company to promote the use of AI tokens.
On Monday’s earnings call, Chief Technology Officer Shyam Sankar said Palantir’s customers are burning through a record number of tokens on the company’s AI platform, AIP, as costs are falling rapidly.
Tokens are the building blocks of AI. Each word accounts for roughly 3/4 of the words processed by a chatbot, and AI companies often charge based on the number of tokens used.
“Tokens are the new coal,” Sankar said, adding, “AIP is the train.”
He pointed to Jevons’ paradox, the idea that increased efficiency increases overall consumption.
“When the Victorians created more efficient steam engines, everyone expected coal consumption to go down. Instead, coal consumption skyrocketed,” Sankar said.
Palantir, which builds bespoke software and AI systems for government and business customers, announced strong first quarter results.
Sales in the United States doubled from the same period last year to $1.28 billion, and total sales increased 85% to $1.6 billion.
At the same time, Palantir is trying to strike a balance. Sankar reiterated that Palantir is countering AI slop by calling itself the “Northrop Zone.”
Palantir says it’s focused on ensuring its AI delivers real value, rather than blindly burning tokens (what developers call tokenmaxxing) and creating dizzying demos that go nowhere.
“More tokens means more slop,” Sankar said.