The world is waking up to token costs. For firms serving mid-market private equity and advisors, this has always been a central concern. But before getting into the tactical mechanics of managing token spend, there is a philosophical point that every decision maker needs to internalize first.
Tokens are not a tactical expense line item like cloud services, ERP, or software spend. Do not treat them as IT spend. Do not let CIOs have sole decision rights on token use.
Tokens have to be understood as a distinct factor of production.
Economists have long recognized that every operator makes decisions about their business by balancing land, labor, and capital. The mix of factors of production is a strategic choice and is core to the business model.
Outsourcing, for instance, was never really about geography. It was a factor substitution decision: replacing domestic labor with capital. The underlying calculus was always the same. Which combination of inputs produces the best output at the right cost?
AI adds a new input to that calculus: compute, measured in tokens.
Like labor, tokens execute tasks. Like capital, they can be deployed on demand and scaled without hiring. But tokens are neither. They are available instantly, operate continuously, and can run across dozens of workflows in parallel.
The operator's job remains the same: find the right balance across available factors.
Using tokens to write a job description you then edit, draft an email you then review, or create a spreadsheet you then fix formulas in is a local maximum. Yes, it helps you perform the task faster. But most likely you are wasting tokens.
You have to take a business model view when making choices about tokens.
Would you deliver to clients through labor or tokens? How would that mix shift over time? Would your software teams be made of labor or tokens?
Without business model choices guiding these decisions, you will most likely chase local maxima and waste time budgeting tokens rather than deploying them strategically.
Tokens are not an IT spend category. Letting CIOs govern token decisions the way they govern cloud infrastructure puts a cost containment lens on what should be a strategic lens.
The right question is not how to minimize token spend. It is which combination of inputs produces the best output at the right cost for your business model. That is a CEO and leadership team conversation, not an IT procurement one.
The firms that get this right early will build fundamentally different operating models from those that treat tokens as a line item to be managed down.