Tokenmaxxing is dead, long live tokenmaxxing

For companies that have measured performance based on token spend, they can now dial it back. Employees have learned to leverage AI for things they wouldn’t have prior. Now they know what’s possible and what’s not.

No one is stupid enough to always measure performance based on token spend and have unlimited budget. It was always a temporary thing to transition the employees to a new world.

Management felt like employees weren't leveraging AI fast enough. That's why in 2025, there were many mainstream articles about how CEOs were forcing their employees to use AI or get fired. Tokenmaxxing was just the other extreme. Companies will arrive at an equilibrium.

There's no need to overthink this.

Edit: One reply cited this X post as an example of why management needed to do this. Trying to change a company with hundreds/thousands/tens of thousands of employees is hard. You have to send one simple message at a time. https://x.com/danluu/status/1487228574608211969?lang=en

Most companies focused entirely on doing "what everyone else is doing" at best or "to see if Programmer Joe can be as productive as the entire team so we can fire the rest".

And many indeed fired employees in droves because they were "underperforming in token spend".

This is true of my current overlords. It slipped recently that the reason they went AI-nuts was that a competitor had announced going “AI first” and the market responded excitedly. Not because they thought it was a good idea: because the market got excited and they didn't want to get left behind.

This is quite a change as our market is financial services and I remember a time when we had to support decades old browsers (one large UK bank who I won't name here had IE6, and only IE6, on many of its user's machines until ~2017) and web servers because they refused to upgrade anything.

> "to see if Programmer Joe can be as productive as the entire team so we can fire the rest"

I'm not sure who Joe is in our outfit, but I'm certainly in the “the rest who are to be fired” set. I've been unhappy in dev & related for years so the AI revolution which I don't care for is where I'm consciously letting myself get left behind to find something else to do with my life. Haven't touched it. Was too late to claim one of the first tranche of Claude licences. And the second. Oops. Maybe I'll use AI in my next big adventure, or maybe my distaste for it all means I have a grand future waiting for me in the hospitality industry!

There's some jobs I'd love to do, but I can't face the bullshit of tertiary education again.

Without some sort of ticket, job choices become more limited?

Yes. Or so I'm told, I've not needed to apply for a job for 26 years…

I have something possible available, though whether it still will be in five months (the earliest I'm likely to leave because of [reasons] and a two-month notice period) is a bit unknown. That five months might be ten as there are other major changes in the company (we were bought a while ago) from which the dust should have settled by Feb, and it makes sense to try to hold out that long to see if I'm still hating things with the same passion at that point.

Without that “something” there are less certain tech based options I could look at, and to be honest I really could do with a proper sabbatical style break. The mortgage is paid, I have savings, and no dependents other than the cats, so I have the luxury of considering that option. And if all else fails I've actually done the arithmetic and I can survive on minimum wage for an extended time if I need to, and hospitality work is something friends can get me into above the many others looking (that bit is less of a joke then people assume: it is seriously part of my plans D & E if I can't stick with A and B & C completely fall through).

1. Source for that 4-word quotation? I googled it, but it appears you are the only person who has ever said it?

2. Even if you made up the quote, source for the claim that "many" "fired employees in droves" for "underperforming in token spend"? (Again, even if the companies never used those words, I'm still interested in the source for the claim about many companies firing employees in droves for low token use.)

I’ve had multiple instances of taking months/years to get some devs to use a more sophisticated git client than GitHub Desktop (so they could properly do anything but the most trivial merges/rebases for example). Or to learn how to use the debugger instead of just printing/logging for debugging. For some of them getting them to seriously figure out how to better use AI required a bunch of repeated prodding.

Funnily enough a few years ago they enthusiastically jumped on copilot’s fancier autocomplete in VS Code, but getting them to really figure out how to get the most out of Claude Code required more pushing.

We are now seeing that Claude Code can do a LOT of heavy lifting in our day-to-day work, but the bulk of our employees are stuck cost-maxing and literally cannot "imagine how you are running into your session limits". "I'm fine with the $20/mo account."

There's a case for the cost-maxing has hurt our company.

Fable, for the few days I had it, would eat through tokens pretty quickly, largely because it tended to work much more on its own. I could give it a task and after asking a few questions it would go off and work for 4-6 hours and be done.

I also run a lot of experiments. I'm trying to be a resource that the rest of my team can learn from as far as what works. For example: when one of the people from our parent company asked about automating payroll entry, I threw their documents and discussion at Claude to see what it'd build. That plus churning on their feedback was ~30 hours of API usage right there.

I'm currently experimenting with "loops", and using codex in those loops to provide feedback and review. That gives me fable-like autonamy (that 30 hours of API usage above), maybe even better. But it uses a lot of tokens. Loops is the bulk of why I got to the weekly limit last week.

Plus I'm having it build an experiment on what my ideal "agent mux" would look like. Herdr is really close, I found it after I started that experiment. Now I'm just letting it run when I have spare usage to see what it comes up with.

There was demonstrably zero cost or consequence analysis, which is also why it was dialed back as soon as the (still) subsidized tokens became just slightly less subsidized, and the wise leaders realized they spent huge sums of money with no way of gauging ROI.

LLMs may have their use cases, but let's not make up free excuses for blithering idiots who, by any rights, should all be fired for cooking up money-burning policies that are textbook implementations of Goodhart's law.

Anyway, just needed to get that off my chest.

Also tokenmaxxing was never an intentional and smart strategy employed by companies like you say. It was a mix of fear of missing out, signaling to investors they were in on the hype and recouping investmenets in data centers

Come on now. Let's not think that we are all smarter than management at these companies.

Your livelihood now depends on tokens remaining subsidized. How long do you think your engineers will continue to have the independent ability to maintain your codebase if the tokens got 20x more expensive?

Buy and sip that intelligence straight from the tap.

Outside of a few well run companies, it's hard not to feel like the average IC is smarter than their leadership.

Big Corporate managers are much more likely to have felt the need to “do AI” from their VPs, who in turn got it from the executive team, who have probably been under fire to produce a coherent magical AI strategy that makes to company scale infinitely while reducing costs. In that environment it’s much more likely to be copy-and-pasted charts from Gartner and buzzwords overheard at conferences, combined with the hope that somebody somewhere will eventually turn it all into something that resembles forward movement.

The presentations were convincing and many bought large upfront wholesale tokens then forced them on their employees.

When the savings didn’t materialize and neither did the profits. And the spend was no longer going down but up, many execs rather than admit they were duped began blaming workers at scale for not making up for their stupid decision.

This is the “get them addicted” part of the platform play.

The problem is unlike any successful drug this was expensive and low payoff.

> Tokenmaxxing was just a way to force employees to start leveraging AI in a meaningful way.

> It was always a temporary thing to transition the employees to a new world.

Trying to understand your justification for rejecting Hanlon’s razor.

  Do you have a source for this?

  the big tech companies needing to pump demand for compute.

This reminds me of the popular opinion on HN for return to office mandates as executives wanting to recover their real estate investments.

Also are we sure it's all at arm's length? Barring a full audit, it's not possible to guarantee that there's no round-tripping or overstating of revenue. With Microsoft also being a provider for OpenAI, they could be creatively using set-off, or using SG&A, in order to overstate their revenue/gross margin/inference profit margin. I of course have no proof, extraordinary claims etc. etc. It's unlikely but we should at least debate the possibility. They have such a huge collective incentive to do it.

[0]: https://www.wheresyoured.at/exclusive-openai-financials/ (no affiliation with the website owner, who has a unique bias in this)

No, it was a sinister way to manufacture your consent to cause cognitive atrophy in your employees so that you lose your ability to independently operate your business.

You'll come to realize this once they begin charging you more and more for tokens but you will probably not blame yourself for it.

The argument is tokenmaxxing was put in place by companies, with the goal of causing their employees to lose knowledge?

The whole tokenmaxxing thing started because Jensen Huang said insane things like having a single engineer spend 250k in tokens or he’d fire him; and that OpenClaw was basically AGI.

> No one is stupid enough to always measure performance based on token spend and have unlimited budget.

Yes the people forcing these mandates absolutely are this stupid because that’s what people like Jensen Huang, Peter Steinberger and Boris Cherney were touting. Seriously have you ever actually talked to an average C-Level about AI? They are absolutely cooked.

You’re the one that’s overthinking it.

Or are you just blathering about things you’ve never experienced because you met the “CEO” of a five person company once? I find grand proclamations by people who speak in TikTok absolutely laughable memeing.

(Difference being, one of these groups is just lying about objective reality that's trivial to independently verify, the other one are just unlicensed therapists with thousand years old rituals).

That’s not quite what was said there, he’s budgeting half a devs salary as token spend in a podcast and that if he had a 500k engineer who spent 5k on it at the end of the year he’d go ape shit.

Now you can say that’s wild, and sure, but this is not a standard c suite exec talking it’s the ceo of Nvidia.

Even ignoring other hiring costs this is essentially an argument that Nvidia top engineers should get more than a 50% performance improvement with extremely heavy AI usage. To me, that doesn’t seem like such an enormous statement. For the head of a multi trillion dollar company entirely driven by AI sales arguing it gives a useful benefit to engineers isn’t that odd and betting on a 50% improvement within Nvidia seems kinda normal.

> Seriously have you ever actually talked to an average C-Level about AI?

Yes. Single digit percentage improvements over time would normally excite them, the idea of cappable cost performance improvements that last which your devs actually want to experiment with and a cultural and customer expectation that you’re doing this is pretty enticing. Particularly during a time when tokens were heavily subsidised - isn’t that the perfect time to do it? Now that has ended there’s a huge focus on roi.

Of course not. That is not what it achieved or could possibly achieve.

> Management felt like employees weren't leveraging AI fast enough.

I agree it was about their irrational feelings.

I also agree with the comment you're replying to as well - the vitriol and anger, along with the "this is just another blockchain bubble" type relies is really interesting. It's so surprising to see the variety of (negative) replies and beliefs people have, along with the general distaste/distrust for management. I guess it's also largely a sign of the times since a lot of ICs probably have a ton of anxiety about their career.

This is especially true for the devs who take the code more seriously than the business that employs them. The technical PM who knows a bit of design are suddenly the kings of the company.

Why would those who agree “take the time to reply”? To say what? “This”? “Agreed”? “This guy knows it”? Those comments don’t add anything of value. When you agree, it only makes sense to reply if you have something to say which wasn’t covered by the original argument.

I'm just pointing out that there are equally, if not more, people who agree with me than what the replies seem to suggest.

I agree, but for a completely different reason. A lot of executives simply chase trends. This was another trend they copied from each other. No reason to imagine they carefully studied the issue.

At the IC level, people don't sense the impending urgency for the overall business. They usually sense the urgency for themselves first. AI has completely changed the software industry in 6 months. We went from having AI write some code and copy/pasting to having AI write 99% of the code in 6 months. SaaS went from nice UX and CRUD code logic being a moat to these being nearly free.

Big software companies have to adapt to this new world or they will be outcompeted by smaller, newer, nimbler companies. That's what management is thinking. For ICs, they're usually thinking about their own jobs first.

When everyone was reading about token leaderboards on all of their social media channels (include social news sites like Reddit and Hacker News) it created token anxiety even at companies that didn’t want a leaderboard. Programmers were afraid that their managers would be secretly ranking them based on token usage and they needed to pump up those numbers to avoid layoffs.

Once teams implemented token budgets in response it creates an ugly situation where a few people feel the need to use as many tokens as they can at the beginning of the budget window to stay ahead.

It’s really frustrating to have this phenomenon leak into a company that was never encouraging or looking for high token use.

Instead there was FOMO mass hysteria. Now there is a backlash. And a lot of time and money wasted.

employees who are on the ai bandwagon are there for the free management attention.

Management is cooked because the damn market is hard, money is tight and they can't afford to fight the top down love and $$$ thrown at AI.

If you zoom out, all the real money spent on energy to keep AI alive isn't going to be held in nvidia stock for too long. it will burst, but its stupid to time it.

A sensible organization machinery will move to optimize the metrics that make money. Often times figuring out said machinery takes iterations. Some of them are idiotic (ref: tokenmaxxing) but they are generally directionally correct.

Accenture was.

You spend money for a potential benefit. In this case it’s also a one off cost to find things that can save money over time.

If my productivity is in line with their expectations, I don’t understand why management cares what tools I’m using to do it. No employer ever told me to use emacs instead of vi, even though I’m 10x more productive in one vs the other. So why all of a sudden does management need to micromanage my tools?

Edit: I mean besides the obvious of "because they will fire you if you don't care"

But idk. They're aiming to fire me eventually and have AI do 100% of my job so meh. Fire me now instead of later.

Because doing so increases the value of their stock options. They might privately think it's as dumb as you do, but apparently the stock market disagrees.

Imagine you had a direct report. They were doing just fine, slightly better than a typical report. Then you found out they were writing all their code in notepad - no linting, no automated tests or live updates, no refactoring tools, no highlighting or any code search. They didn’t have any cross code searches and didn’t have any documentation. When they hit a problem, they’d churn away at it and never reach for docs, google or so.

Still, their performance is in line with what you’d expect from someone in their position.

Would getting them to try emacs, vi, linters, etc be micromanaging them? Do you think they’d perform better with them? They are performing in line with expectations for the role, so why bother with something you think would make them more efficient?

I’ve made this obviously over the top, and can hear already replies from other bemoaning my comparison while missing the point — tools do matter and if you genuinely believe that a developer could be more efficient working in a different way it makes sense to not only want them to try it but to actively fund that change. Hell, this is literally what we argue for in training! Spend money to make someone better at their job!

If you think AI tools make you worse or don’t and can’t help, then that’s one thing. But it makes sense for management if they think it might to spend money on it and to get you to try.

Not only this, but wasn’t everyone here shouting about how tokens were subsidised and it couldn’t last? If so, wasn’t the first half of this year a really excellent cheap time to do the maxxing?

Your hypothetical developer wouldn't be using notepad because they're unaware of other editors, they'd be using it because they evaluated other editors and concluded that, for whatever reason, they would be worse for them. I'd be fascinated to hear why they came to that conclusion, but I'm not going to tell them they're wrong if they're performing acceptably, aren't constantly breaking CI because the linter rejects their code, etc. Everyone is different, and I'm not narcissistic enough to think the fact that I would be way less productive without my modal editor, LSP, linter, terminal multiplexer, etc. justifies forcing everyone else has to adopt my exact setup.

Surely for this specific example of managerial stupidity it just is, but I mean more generally, it's a beautiful posting.

I aspire to have this much misplaced belief in any humans at all, let alone CEOs.

"We can't know all the parts of our business that AI can do a good job automating [because it's so new] but we also don't want to be the last to know and outcompeted along the way. Please throw AI at random parts of your job [and we're tracking this] so we can generate feedback from employees on where to invest in additional automation"

My company has since provided a ton of high-value little AI workflows, alongside a handful that didn't pan out. AI-assisted software development is a major change overall, but the general business-process updates from AI are a net-positive to me.

They really don’t IMO. Hell most of the companies pushing these tools don’t even agree what LLMs are for or are capable of. Too many people are trying to use it to cut too many corners on their work (making more work for everyone else) or are using it to attempt things they don’t know how to do, which means they are incapable of vetting the results, (vibe coding anyone?) which means more instances of the first case or even getting hurt.

I wish there was an independent body truly assessing the impact of big tech decisions and running counterfactuals. Instead of accepting nice stories like this as a given.

Using Claude, I recently tried to do something similar for the Covid hiring spree: https://claude.ai/public/artifacts/21bba86a-ad5d-439c-861d-0...

Still leaves huge questions about ROI ($26tln of TAM, anyone???) and doesn't quell the concerns brought forward by AI detractors though.

Really? ~4 years ago our CEO hired a consultant to fly out several times to do team building exercises. We can't afford to do our 3-year server refresh cycle, but the consultant was no problem to pay.

We just recently had branding consultants come in and also spent thousands of dollars (AWS charges) on rebranding all our photos. We operate in a captive market, if you want to operate in our market you are required to subscribe to our service, and if you aren't in our market you can't subscribe. Branding at the end of the day drives 0 sales.

Heck, reminds me of the time a company I was working with hired a new CTO and one of the first things he did was as "server renaming scheme" using obscure (to the US-centric staff) city names from around the world (database servers are Swiss city names, web servers are Denmark, storage is Finland). We went from cattle naming to pet naming, for a CTO that lasted ~6 months.

In my experience company leadership is not quite as thrifty as this article likes to think they are.

Or more accurately, "Because this is good for my career."