Companies Look to Cloud

Companies Look to Cloud-Era Solutions to Control AI Spending

Businesses have reportedly turned to an array of tactics to help manage rising AI spending.

As The Wall Street Journal (WSJ) reported Tuesday (June 30), artificial intelligence (AI) is increasingly being billed according to usage, with companies facing volatile pricing for tokens, the essential building block of AI computing.

“With AI, you’re putting the credit card in the hands of the end user. If you have no control over that, or if the end user is not educated enough, they’re going to run up that tab,” Chris Reed, a senior director of IT finance at online travel company Priceline, told the WSJ.

According to the report, tech leaders at some companies have begun employing cost-control strategies developed during the rise of cloud computing.

Kathy Kay, chief information officer of Principal Financial Group, said financial services companies are “putting governance and optimization practices in place, similar to what companies have done with cloud, to manage costs as we scale.”

For example, Principal is concentrating on using the right AI model for the proper task, so that “higher usage doesn’t necessarily translate into higher costs,” said Kay.

“Given how quickly pricing and capabilities are evolving, we’re designing for flexibility so we can adapt over time and continue to deploy AI efficiently,” she added.

Ravi Soin, CIO and chief information security officer of Smartsheet, said the company’s FinOps — a mix of financing, engineering and product — team is charged with tracking overall AI spend. The software company has created automated alerts to notify employees that they’re about to reach their token limits.

“We have user dashboards available to the entire company, by department, by manager, so you have real-time visibility on how often and what your costs are, so it isn’t a surprise at the end of the month,” he said.

Meanwhile, other companies are benefiting from this trend, PYMNTS wrote earlier this month. For example, Ramp, a financial operations platform, raised $750 million at a $44 billion valuation, almost tripling its worth in a year.

“The company is betting that AI consumption, billed by the token and fluctuating with every prompt and agent action, has become a cost category that most enterprise finance teams can’t track, allocate or control,” that report said.

“The problem Ramp is targeting didn’t exist at scale two years ago,” PYMNTS added. “AI providers initially priced access on flat subscription terms. As agentic models moved into coding, customer service, research and procurement, usage-based billing became standard. Every step an agent takes runs a meter.”