Palantir CEO Alex Karp has taken aim at the way much of the artificial intelligence industry does business, arguing that its obsession with "tokens" is a mistake.
According to Livemint, Karp said the AI industry has "gone completely wrong" with tokens and singled out leading AI firms OpenAI and Anthropic for criticism. He argued that these companies lean on costly token-based models rather than approaches focused on return on investment.
Tokens are the small chunks of text that AI systems process, and they are the standard unit that companies like OpenAI and Anthropic use to price and meter their models. Karp's complaint, as reported, is that this pricing-and-scaling mindset has pushed the industry in the wrong direction.
Benzinga reported the same theme, summarizing Karp's view that AI labs are "chasing tokens." NDTV went further, reporting that Karp called the AI industry "effing insane" while slamming OpenAI and Anthropic.
Per Livemint, Karp also stressed that companies should concentrate on return-on-investment approaches instead. He raised concerns about data ownership and pointed to the rapid advancement of Chinese AI capabilities as a reason the industry needs to rethink its priorities.
Karp leads Palantir Technologies (NASDAQ: PLTR), a company that sells data and AI software to governments and businesses, giving his critique of rival AI firms a competitive edge worth noting.
Why it matters: When the head of a major AI-adjacent company publicly calls the industry's dominant business model "insane," it signals a widening debate over whether today's AI spending actually pays off — a question that affects investors, customers and the broader race with China.