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AI over humans: Startups now spend more on compute than payroll

Startups brag that AI costs now outpace human salaries
Startups brag that AI costs now outpace human salaries / Photo: Shutterstock, photo editor: Dastan Shanay

A new class of tech entrepreneurs is treating massive artificial intelligence invoices as a badge of honor, a trend dubbed «tokenmaxxing.» Rather than minimizing overhead, these leaders view six-figure monthly bills for AI compute as a primary indicator of growth and innovative scaling, 404 Media reported.

Scaling with intelligence

The report notes that many startups are now reallocating their “headcount budget” to pay for AI tokens instead of human salaries. Amos Bar-Joseph, CEO of Swan AI, recently publicized a $113,000 monthly bill for AI usage, asserting that his four-person team is prioritizing intelligence over expanding its staff size. This shift reflects a broader industry goal of replacing traditional roles in engineering, legal, and support services with autonomous AI agents.

The rise of autonomous companies

The tech sector is increasingly fixated on the ideal of a “one-person, billion-dollar company”. 404 Media highlights that some startups, such as the telehealth firm Medvi, are reportedly generating massive revenue with a skeletal human staff by relying heavily on AI-driven processes. Founders argue that while human labor is difficult to scale, AI output can grow exponentially while costs remain linear.

Startups brag that AI costs now outpace human salaries
Photo: Kursiv.media archive

Hidden risks and sustainability

Despite the enthusiasm, significant challenges remain regarding the quality of “workslop” and the financial viability of these projects. Because AI providers are heavily subsidizing the current cost of compute, it is unclear if these expenses are sustainable long-term. Additionally, total automation is prone to expensive errors, such as AI agents burning through thousands of dollars while caught in unproductive task loops.