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News of the day
1. US companies are spending less on AI, according to the latest Ramp AI Index from Ramp economist Ara Kharazian. → Read more
2. OpenAI introduces virtual try-on and a favorites feature for ChatGPT, leveraging its new Images 2.5 model for enhanced shopping experiences. → Read more
3. New study reveals AI now surpasses CPAs in speed and accuracy for structured accounting tasks, though human oversight remains crucial for complex processes. → Read more
4. LLMs lack true reasoning, unlike AlphaGo's deliberative process. A new approach is needed for trustworthy AI in science and medicine. → Read more
Our take
Hi Dotikers!
The latest Ramp AI Index just dropped a stat worth sitting with: American businesses are using more AI than ever, and paying less for it. On paper, that sounds like the deal of the century. In reality, it tells a far more interesting story about where this market is heading.
The numbers are striking. Coforge recently reported that the cost of tokens needed for the same level of intelligence has fallen roughly 100-fold in seven months, while consumption exploded 8,000-fold. OpenAI slashed prices on its flagship models by up to 80%, and usage jumped 14-fold almost overnight. AI is behaving exactly like every other technology that went mainstream: cheaper per unit, consumed in massive quantities. We are basically watching the fast fashion moment of artificial intelligence, except the clothes write your emails.
But here is where I think most companies are reading this wrong. Falling prices do not mean falling bills. The Financial Times points out that usage-based pricing is pushing many organizations toward budget-busting surprises, and Ramp's own data shows the top 1% of US firms spending a median of $7,400 per employee on AI, while the typical company spends under twelve dollars. That gap is not a detail, it is the whole story. Cheap AI is a trap for the unprepared and a weapon for the disciplined. The winners will not be the ones who spend the most or the least, but the ones who actually measure what all those tokens produce.
So yes, celebrate the price drops. Then go look at your consumption curve, because that is where the real conversation starts. This week's newsletter digs into exactly that tension.
Alex.
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