Microsoft has announced major pricing changes for GitHub Copilot - changes so drastic that a Reddit user reports their company has begun calling it the Tokenpocalypse. On the latest episode of TechCrunch’s Equity podcast, hosts Kirsten Korosec, Sean O’Kane, and Anthony Ha gathered to discuss what this means for an AI ecosystem that has, until now, run on a steady diet of investor subsidies and wishful thinking.
The core problem: the whole AI ecosystem is heavily subsidized by investor money. Stuff that seems free is actually wildly expensive, and now that cost is getting passed to the end consumer. As Anthropic and other big AI labs prepare to go public - awkward questions about profitability looming - we can expect similar price hikes and usage restrictions across the board. Kirsten noted that tokenmaxxxing went from buzzword to cautionary tale in about six months, and Sean wondered whether AI labs can collapse costs enough to meet customers' spending appetite. Meanwhile, Anthony pointed out that Uber went through a similar arc in just a month and a half: blow through the AI budget, then clamp down. And if Uber is struggling, what hope is there for anyone else?
Kirsten emphasized how quickly things are moving: the whole pricing mechanism was set before business models were solidified, and now the government is trying to catch up - President Trump signed an executive order giving the government a chance to review powerful AI models. The risk factors in IPO filings, she noted, are evolving day by day. Anthony drew a parallel to Uber's transformation: it had to squeeze drivers and expand into new businesses to become profitable. The question is whether AI labs can find something squishy enough to squeeze. Sean is skeptical: these are harder, more straightforward costs. The Tokenpocalypse, it seems, is just getting started.