SynopsisPalantir CEO Alex Karp has slammed the token-based pricing of AI giants like OpenAI and Anthropic, arguing businesses are wasting money without clear returns. Karp said companies are now moving away from simply buying more tokens and are instead focussing on whether their AI spending delivers a clear return on investment.AgenciesPalantir CEO Alex KarpPalantir chief executive Alex Karp has criticised the token model used by Anthropic and OpenAI, saying businesses are spending too much on artificial intelligence without seeing enough value in return.“I’m not throwing shade at them, but something has gone completely wrong,” he told CNBC's ‘Squawk Box’. “The basic view among enterprises in this country is I’m going to chillax and waste my time with tokens.”Most leading AI companies charge customers based on tokens (small units of text that AI models process when users type prompts or receive responses). As newer AI models become more powerful, they also require more computing power, making them significantly more expensive to run.Karp said companies are now moving away from simply buying more tokens and are instead focussing on whether their AI spending delivers a clear return on investment.That shift is also pushing businesses towards open-weight AI models. Unlike closed models, open-weight models make their trained parameters available, allowing companies to customise them and run them on their own infrastructure at a much lower cost. Karp warned that companies should not underestimate China's pace of progress in AI development. Chinese models are improving rapidly, increasing pressure on leading US AI firms. He added that more businesses are choosing to build and train their own models using their internal data, rather than relying entirely on third-party AI providers.“What aligns me with Nvidia, and I think is what the technical customers want, which is control over their compute, their models, their data stack, and their alpha,” Karp told CNBC. “They want to know they own the means of production. It’s not being transferred to someone else.”In simple terms, Karp argues that companies want full control over the computing infrastructure powering their AI, the data used to train it, and the models themselves, instead of depending on external AI labs.Earlier this week, Palantir expanded its partnership with Nvidia to help US government agencies build custom AI models using Nvidia's computing infrastructure. The arrangement will allow agencies to train AI on their own data while retaining ownership of the models and the knowledge embedded in them.Meanwhile, on Tuesday, Palantir published a nine-point manifesto on X, advocating AI sovereignty — the idea that organisations and governments should own and control their AI systems and data. The post also criticised "tokenmaxxing" as a business model. ...moreElevate your knowledge and leadership skills at a cost cheaper than your daily tea.Subscribe Now