Soaring AI spend will hit company earnings
Technology investor Chamath Palihapitiya said Tuesday that the use of artificial intelligence could negatively impact some companies’ earnings, in part because senior executives will have to deal with expenses “they didn’t know existed in their organizations.”
“CEOs and CFOs, in my opinion, probably have no idea how much tokenmaxxing is going on in their organizations,” Palihapitiya told CNBC. “I think you’ll miss a day and EPS will drop a few pennies and the CEO will ask the CFO, ‘What happened?’ ” he will say.
Palihapitiya is the founder of investment firm Social Capital, CEO of AI company 8090, and host of a tech podcast called “All-In.” He is a controversial figure in Silicon Valley for his role in heavily promoting special purpose acquisition companies, or SPACs, during the Covid pandemic. shuttered It caused huge losses to investors.
“Who didn’t make money? Speculators,” Palihapitiya said Tuesday. “Do I feel sorry for them now? Yes. Were my incentives incompatible with theirs? Also yes.”
Palihapitiya said “some parts” of those investments are paying off, but added that promoting SPACs on social media and CNBC was a “big mistake.” It launched a new SPAC. American Exceptionalism Acquisition Corp. A (AEXA)It was designed last year to target companies in the fields of artificial intelligence, energy, defense and decentralized finance.
In 2024, Palihapitiya founded the company 8090, which creates a platform where people can collaborate with AI representatives to develop enterprise software. company announced A $135 million financing round led by sales force In June.
Palihapitiya is also among a growing chorus of investors and tech executives warning that the era of so-called tokenmaxxing, in which employers encourage their employees to use as much artificial intelligence as possible, is over. In March, he said his company’s AI spending had risen to over $10 million a year, which he said was “very scary” as the founder of a small startup.
“Anyway, I’m just sharing our current experience because I suspect many other companies are also fueling this revenue growth without generating a meaningful return on investment,” he wrote a post on x In that case.
Palihapitiya’s comments on AI spending on Tuesday echo concerns shared by palantir Harshly criticizing CEO Alex Karp OpenAI And anthropic for token-based pricing models earlier this month.
“I’m not throwing shade at them, but something went completely wrong,” Karp told CNBC’s “Squawk Box.” “The basic view among businesses in this country is I’m going to rest and waste my time on tokens.”
WRISTWATCH: Chamath Palihapitiya says it was a ‘big mistake’ for me to come on CNBC and talk about SPACs
