There’s no question that every company needs to include AI in its tech budget. But as costs climb, it’s worth taking another look at what your company is spending and how to make it more reasonable. Cost structures that charge per “seat” on an enterprise model, or per agent created, may be ways to quantify use, but they can also get expensive quickly. And buying a finite number of “tokens” for amounts of AI compute that are used can also end badly. Uber, which used all of its AI budget for the year in just four months, is one example of companies finding themselves losing the tech spending race.

Sameet Gupte, CEO and cofounder of AI platform EvoluteIQ, thinks the best way to charge companies for AI technology is based on the results they get. He believes many companies are moving toward this kind of pricing, and talked to me about how to negotiate with AI companies over price—and determine what’s worth it and what isn’t. An excerpt from our conversation is later in this newsletter.

Until next time.

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ECONOMIC INDICATORS

Federal Reserve Chairman Kevin Warsh at his swearing-in ceremony last week.

Anna Moneymaker/Getty Images

Although Kevin Warsh was confirmed as the new Federal Reserve chairman earlier this month, minutes released last week from the Open Market Committee’s April meeting signify President Donald Trump may not get the quick interest rate cuts he wants. The board voted to hold baseline interest rates steady between 3.5% and 3.75%, but according to the minutes, a majority of participants stressed an interest rate increase may be needed if inflation above the Fed’s 2% goal persists.

Board members said the ongoing Iran war has significant implications for employment and inflation, especially as it gets longer. Inflation has continued to creep upwards, hitting a three-year high of 3.8% in April, according to Bureau of Labor Statistics numbers. And while Forbes senior contributor Simon Moore writes that most analysts expect interest rates to hold steady at the Fed’s June meeting—Warsh’s first as chair—the odds are increasing for a hike later in the year.

NOTABLE NEWS

The long-rumored and highly anticipated mega-IPO of SpaceX is preparing for liftoff. Elon Musk’s space exploration, AI and satellite internet company officially filed paperwork for its IPO last week with a target of becoming publicly traded in June. The company’s valuation could range from $1.75 trillion to $2 trillion, making it the largest IPO of all time.

The IPO filing brought many of SpaceX’s finances into public view for the first time. The company generated $18.7 billion in revenue last year, which represents a 33% year-over-year increase. It had $4.9 billion in losses and $20 billion in capital expenses in 2025. On the AI and social media side of the business, xAI had an operating loss of $6.35 billion and $3.2 billion in revenue last year. X has about 550 million monthly active users. The connectivity part of the business, which includes Starlink satellite internet, is the only profitable part of the company. The filing also showed that Musk controls 85% of the company’s shareholder voting power—no other entity has a stake larger than 5%.

SpaceX’s paperwork is the first concrete move for several potential blockbuster IPOs that may happen in 2026. OpenAI is also rumored to be looking at an IPO this year and is reportedly about to file its first confidential paperwork with the Securities and Exchange Commission.

POLICY + REGULATIONS

The Small Business Administration announced last week that it will double its maximum loan amount to $10 million. Forbes’ John Schroyer writes that, in addition to the $5 million companies can borrow through 7(a) loans, the same companies will also be able to take out $5.5 million 504 loans, designated for “major fixed assets.” This means that more capital-intensive businesses—such as manufacturing, construction and retail—have greater access to the federal government’s loan program. The largest downside as of now? The new policy doesn’t start until July 4, so businesses have time to plan how to use those funds, but need to wait a bit to access them.

OFF THE LEDGERHow To Tame Your Company’s AI Costs

EvoluteIQ cofounder and CEO Sameet Gupte.

EvoluteIQ

AI platforms and technology are extremely important for companies, but, from a financial perspective, they can be unsustainable. The way AI providers are charging companies for their technology—from the “per seat” models of traditional enterprise software to a finite number of “tokens” for compute actions—is beginning to add up.

I spoke with Sameet Gupte, CEO and cofounder of AI automation platform EvoluteIQ, about what CFOs should consider when deciding on their AI tech investments—and how to negotiate something that will not break the bank in the future. This conversation has been edited for length, clarity and continuity.

When a CFO is trying to figure out investments in AI, how do they define a good use? What is worth paying for?

Gupte: A lot of AI tools and apps out there will come and say, ‘Oh, we bring in efficiency by 30%. We bring in productivity. We cut down headcount. We do this. We do that.’ All may be true, but a good CFO has to look at all these different use cases and see how it actually translates into real cash and real numbers on the P&L. Not adjusted EBITDA, but genuine net cash, savings or productivity—where the revenue is really going up because you have implemented an AI tool and you don’t need to hire new salespeople, but the app is learning by itself.

You can truly say, ‘My revenue went up by 20%, but my sales and marketing cost is flat.’ That’s real data. Or, ‘When I implemented AI in my order to cash or report to the board use cases, I was able to collect $4 million 17 days before, which I’ve not done in the last six quarters.’

When you can quantify that and touch and feel, that’s when this is a real use case—because there’s a lot of dressing up, a lot of lipstick on the pig that’s going on. Let’s count the cash, which is the real money that is either coming on your top line or bottom line.

Are AI companies negotiating with CFOs over the way they bill companies for services? And are CFOs able to get deals that work for them?

Truth be told, everyone has realized the writing is on the wall: they need to move toward outcome-based pricing—both the vendor as well as the customer. We have a lot of baggage and history over the last so many years for people to just flip the switch. What we are seeing is, for [AI companies] to overnight go and say, “I’m going to cannibalize the revenue because now I’m going to be outcome driven,” it will have a massive impact—not just on the software companies, but on the stock price and pension funds and other investments. The ripple effect will be to people who have got 401ks, because everything is interconnected.

The smarter guys are stepping in and saying: ‘Here is the path of how we will get you there in the next three or four years.’ They’re putting a bridge model in the middle: a combination or a hybrid with a clear understanding that essentially gives the customer the time to adapt. Because the one thing is I may come and be ready with the model, but the customer also needs to be ready.

I don’t think people are looking to just switch vendors overnight because of pricing. But here is the thing: We have very astute CFOs who understand how P&Ls work. At the end of the day, there is something bigger than vendors of AI: your stock, shareholders and investors. You are now seeing the customers coming back and saying to the vendors, ‘We love your product, but here’s the truth of life: This is what my shareholders [and board] are asking. This is what my competitors are doing, and I cannot operate at this constructure. I have to be competitive. I have to have the right growth stock price. I have to deliver for my organization. So either you show me the path, or let’s work in a way that we can migrate out because you’re not willing to walk the future road with me.’

What advice would you give for CFOs who are trying to make all parties happy with AI investment costs?

Organizations that are willing to move to outcome-based models will very quickly create high-value use cases. Bet on those companies which are willing to sit down with you and transform their pricing models to adapt to that, because those are the ones which will solve your most complex problems and give you the biggest genuine return.Buying point solutions is dead. It cannot be the wild, wild west, where you’re buying one AI tool for finance, one for HR. Those days are gone because then you cannot have harmony. You need a central nervous system to govern these decisions with intelligence. Make sure there’s good governance, otherwise the whole thing will just collapse.COMINGS + GOINGSWater heating and treatment provider A.O. Smith selected Carrie L. Anderson to be its next executive vice president and chief financial officer, effective July 1. Anderson joins the firm from The Campbell’s Company, where she worked in the same role. She will succeed Charles T. Lauber, who is retiring.Footwear brand portfolio Caleres appointed Dan Karpel as its new senior vice president and chief financial officer, effective May 20. Karpel steps into the role permanently after working as the company’s interim chief financial officer and chief accounting officer.Data center construction and operations firm T5 Services tapped Mason Thornburg as chief financial officer. Thornburg joins the company from Vision Hospitality Group, where he worked in the same role.STRATEGIES + ADVICE

NASA Johnson Space Center Director Vanessa Wyche shared an unconventional secret to her success: Failure. It’s not something to be ashamed of, but a chance to gather intelligence and continue to move forward.

AI isn’t just another piece of software, and rolling it out is a true strategic leadership challenge. Truly adopting AI in the workplace isn’t just about replacing lower-value human work with technology, but about changing relationships with employees, strategy and technology itself.

QUIZ

In an interview last week, which tech billionaire said he didn’t think the bottom 50% of earners in the U.S. should pay income taxes?

A. Sam Altman

B. Mark Zuckerberg

C. Sergey Brin

D. Jeff Bezos

See if you got the right answer here.