ChatGPT transformed AI from a niche, behind-the-scenes tool into one of the fastest-growing consumer products in history. That’s only accelerated this year, as use of tokens—the basic building blocks of any AI query—has exploded, thanks to widespread enterprise adoption and the rise of agentic AI platforms like OpenClaw.
That’s caused surging AI costs in enterprises, as their systems start to consume more and more tokens. “Every chat generates a token, and when you scale AI use across organizations, costs start adding up,” Prakash Arunkundrum, HP’s chief strategy and transformation officer (CSTO), tells Fortune. “This is what all the data center guys are trying to solve: How to bring the token cost down.”
HP’s solution to the token problem is to sidestep it entirely, by shifting AI from the cloud to people’s devices, or the “edge.” HP is betting on “AI PCs,” personal devices capable of running AI models locally, and has also debuted its own local-first AI model, HP IQ.
“At the core of our strategy, we are building AI-powered devices, think AI PCs, Copilot-enabled printers, and meeting rooms that have smart intelligence peripherals which understand you,” Arunkundrum says. “We’re then stitching them together with software, so that we can deliver experiences in an office across the entirety of your device fleet.”
