Mercor's CEO says it now spends more on AI tokens than employee salaries

• Mercor’s CEO says the $10 billion startup now spends more on AI tokens than employee pay.
• Before long, he says, the average company could be spending more on AI compute than on salaries.
• Some tech leaders are questioning whether soaring AI costs are producing returns.

Foody said that falling costs and rapidly improving model capabilities are driving a Jevons paradox-style effect, where cheaper AI leads to significantly more consumption rather than less.

He said Mercor measures the performance of different AI models for specific business tasks and evaluates whether newer models offer better value.

The result, he said, is a future in which AI becomes a core operating expense for companies, potentially rivaling or surpassing the cost of human labor itself.

“Humans will still play an important role at the things models can’t do,” he said. “But I expect that cost of inference, cost of compute will exceed that.”