Are AI tokens the new signing bonus or just a cost of doing business?

This week, a taxable that has been boomeranging astir Silicon Valley bounced into the spotlight: AI tokens arsenic compensation. The thought is straightforward capable — alternatively than giving engineers lone salary, equity, and bonuses, companies would besides manus them a fund of AI tokens, the computational units that powerfulness tools similar Claude, ChatGPT, and Gemini. Spend them to tally agents, automate tasks, crank done code. The transportation is that entree to much compute makes engineers much productive, and that much productive engineers are worthy more. It’s an concern successful the idiosyncratic holding them, is the idea.

Jensen Huang, the leather-jacket-wearing CEO of Nvidia, seemed to seizure everyone’s imaginativeness erstwhile helium floated the conception astatine the company’s yearly GTC lawsuit earlier this week that engineers should person astir fractional their basal wage again — successful tokens. His apical people, by his math, mightiness pain done $250,000 a year successful AI compute. He called it a recruiting instrumentality and predicted it would go modular crossed Silicon Valley.

It isn’t wholly wide wherever the thought was first, well, ideated. Tomasz Tunguz, a renowned VC successful the Bay Area who runs Theory Ventures and focuses connected AI, data, and SaaS startups — and whose penning connected each things information has garnered a loyal pursuing implicit the years — was talking astir this successful mid-February, penning that tech startups were already adding inference costs arsenic a “fourth component to engineering compensation.” Using information from the compensation tracking tract Levels.fyi, helium enactment a top-quartile bundle technologist wage astatine $375,000. Add $100,000 successful tokens and you’re astatine $475,000 afloat loaded — meaning astir 1 dollar successful 5 is present compute.

That’s nary coincidence. Agentic AI has been taking off, and the release of OpenClaw successful precocious January accelerated the speech considerably. OpenClaw is an open-source AI adjunct designed to tally continuously — churning done tasks, spawning sub-agents, and moving done a to-do database portion its idiosyncratic sleeps. It’s portion of a broader displacement toward “agentic” AI, meaning systems that don’t conscionable respond to prompts but instrumentality sequences of actions autonomously implicit time.

The applicable effect is that token depletion has exploded. Where idiosyncratic penning an effort mightiness usage 10,000 tokens successful an afternoon, an technologist moving a swarm of agents tin stroke done millions successful a time — automatically, successful the background, without typing a word.

By this weekend, the New York Times had enactment unneurotic a smart look at the alleged tokenmaxxing trend, uncovering that engineers astatine companies including Meta and OpenAI are competing connected interior leaderboards that way token consumption. Generous token budgets are softly becoming a modular occupation perk, the insubstantial reported, the mode dental security oregon escaped luncheon erstwhile was. One Ericsson technologist successful Stockholm told the Times helium astir apt spends much connected Claude than helium earns successful salary, though his leader picks up the tab.

Maybe tokens truly volition go the 4th pillar of engineering compensation. But engineers mightiness privation to clasp the enactment earlier embracing this arsenic a straightforward win. More tokens whitethorn mean much powerfulness successful the abbreviated term, but fixed however accelerated things are evolving, it doesn’t needfully mean much occupation security. For 1 thing, a ample token allotment comes with ample expectations. If a institution is efficaciously backing a 2nd engineer’s worthy of compute connected your behalf, the implicit unit is to nutrient astatine doubly the complaint (or more). And there’s a harder question underneath that: astatine the constituent wherever a company’s token walk per worker approaches oregon exceeds that employee’s salary, the fiscal logic of headcount starts to look antithetic to a CFO. If the compute is doing the work, the question of however galore humans request to beryllium coordinating it becomes harder to avoid.

Jamaal Glenn, an East Coast-based Stanford MBA and erstwhile VC turned fiscal services CFO, likewise points out that what whitethorn look similar a perk tin beryllium a clever mode for companies to inflate the evident worth of a compensation bundle without expanding currency oregon equity — the things that really compound for an worker implicit time. Your token fund doesn’t vest. It doesn’t appreciate. It doesn’t amusement up successful your adjacent connection dialog the mode a basal wage oregon equity assistance does. If companies successfully normalize tokens arsenic pay, they whitethorn find it easier to support currency comp level portion pointing to a increasing compute allowance arsenic grounds of concern successful their people.

That’s a bully woody for the company. Whether it’s a bully woody for the technologist depends connected questions astir engineers don’t yet person capable accusation to answer.