32 mins ago - Business

Axios C-Suite: Why the token is your future cost-driver

Jim VandeHei

Illustration of Benjamin Franklin peering out from behind a pile of crypto coins. — Illustration: Gabriella Turrisi/Axios

You soon won't just be paying for software — you'll also foot the bill for the AI thinking your AI-powered software does.

It's worth 60 seconds to understand what that actually means because it will start showing up in your finance reviews.

Why it matters: Per-seat pricing was predictable, but it's about to become a relic. In the AI era, costs will increasingly be based on how many tokens you burn through.

Tokens, at their simplest: the chunk of text AI reads or writes. Verbose AI uses more tokens, making it more expensive.

Three things to familiarize yourself with ASAP to control verbosity and cost:

Routing: Ask easier questions to cheaper AI models (open-source models, lighter versions of Claude and ChatGPT), harder ones and more complex tasks to advanced frontier models (Claude Opus 4.7, GPT-5.5 Thinking or Pro).
Caching: Claude and ChatGPT can be configured to store repeated context — like system prompts or documents — server-side so you only pay full price once and a fraction of the cost on every subsequent call.
Compressing: Every AI request drags the full conversation history along with it. Strip each request down to its shortest form before sending, paying only for what's essential.

The bottom line: Unless you're encouraging "tokenmaxxing," your AI line item might outgrow every other software bill on your P&L if you're not careful.

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Axios C-Suite: Why the token is your future cost-driver

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