Microsoft canceled its internal Claude Code licenses this week after token-based billing made the cost untenable, even for a company with effectively infinite cloud resources.

Uber's CTO sent an internal memo warning the company burned through its entire 2026 AI budget in just four months.

American AI software prices have jumped 20% to 37%, and GitHub (owned by Microsoft) is dropping flat-rate plans for usage-based billing across its products.

This is how the AI revolution is different from the INDUSTRIAL revolution.

Steam engines made work faster but also cheaper. machines were expensive to build but once the factory was running, each product became cheaper to make.

AI is complicated.

AI is making work more productive (arguably) but with token-based pricing, you don’t own the machine. you rent it every time it thinks, writes, edits, debugs, or retries.

If the AI machine produces faster, the bill also grows bigger. the AI revolution may lower labour time but it can also raise usage cost to the point where the “replacement” becomes more expensive than the work it replaced.