Microsoft has just unveiled significant price hikes for GitHub Copilot — shifts so dramatic that one Reddit user dubbed the situation the “Tokenpocalypse.” On the newest episode of TechCrunch’s Equity podcast, Kirsten Korosec, Sean O’Kane, and I explored what these changes could mean for the broader AI landscape. Ultimately, with Anthropic and other major AI firms preparing to go public—raising uncomfortable questions about profitability—we can expect comparable price hikes across other AI tools, along with tighter usage limits as companies scramble to manage expenses. “The real question is whether these AI labs can drive down costs and advance the technology fast enough for it to align with what customers are actually willing to pay.” Sean pondered. Meanwhile, Kirsten observed that this also illustrated “how rapidly everything is changing.” In just a few months, companies became obsessed with “tokenmaxxxing” before abandoning it because of the exorbitant costs. As AI companies prepare their IPO filings, she asked, “How do you even document these risks when they’re changing right in front of us?” Keep reading for a preview of our conversation, which has been edited for length and clarity.
Anthony Ha: When we were planning this, Sean, you referred to it as the Tokenpocalypse. And I’d love to hear more of your thoughts on it, but there’s the recent case of Microsoft and GitHub Copilot switching to higher per-token pricing instead of a flat rate. This entire ecosystem is still massively subsidized by investor capital. In reality, things that appear to have no cost can actually be extraordinarily expensive.