Palantir CEO criticises OpenAI, Anthropic's token-based AI pricing

Alex Karp also cautioned against underestimating China's rapid progress in AI, saying the country is advancing faster than many in the industry acknowledge.

US-based AI software firm Palantir's Chief Executive Officer (CEO) Alex Karp has criticised the token-based pricing model used by OpenAI and Anthropic, saying enterprises are being pushed towards expensive artificial intelligence (AI) use at a time when businesses are seeking cheaper, more efficient alternatives.

 

Speaking to CNBC on Wednesday, Karp said, "I'm not throwing shade at them, but something has gone completely wrong." He added, "The basic view among enterprises in this country is I'm going to chillax and waste my time with tokens."

 

His remarks come as the cost of running frontier AI models continues to rise, prompting enterprises to shift focus from maximising token usage to prioritising returns on investment and exploring lower-cost open-weight or in-house AI models.

 

China catching up, businesses turn to in-house AI models

 

Palantir CEO also cautioned against underestimating China's rapid progress in AI, saying the country is advancing faster than many in the industry acknowledge.

 

Chinese AI firms, including DeepSeek, have challenged the dominance of US frontier labs with open-source models that deliver comparable performance at significantly lower cost. This has intensified the debate over AI pricing and accelerated firms' interest in open-weight alternatives.

 

Karp said, talking to CNBC, that businesses are increasingly moving away from relying on large, general-purpose AI models. Instead, they are building and training smaller, proprietary models tailored to their own needs.

 

Open-weight models and AI sovereignty gain traction

 

Karp said he sees open-weight models as a potential solution for CEOs frustrated by AI labs.

 

As token costs surge, companies are moving to adopt open-weight models, which offer a viable alternative with similar results at a fraction of the price.

 

Earlier this week, Palantir expanded its partnership with Nvidia to use the chipmaker's AI software and computing platform to develop custom AI models for US government agencies.

 

"What aligns me with Nvidia, and I think is what the technical customers want, is control over their compute, their models, their data stack, and their alpha," Karp told CNBC.