The AI Spending Trap

0:00Eric Siu:When a buyer asks AI for a solution like yours, does your business come up? Most companies have no idea. And by the time they find out, they've already lost the deal to someone who did. HubSpot AEO helps you show up in those moments with the right answers buyers are looking for. Before the first click, before the first form fill. That's the moment HubSpot AEO is built for. Check out HubSpot.com, the agentic customer platform for growing businesses. Remember I was talking how TVPN does the ads at the end? So this time I found the ad. So I'm going to show it to everyone and then show kind of what's working for me on Twitter right now.

0:34Eric Siu:And then we can move over to Token Maxing.

0:37Neil Patel:TBPN's daily newsletter has op-eds that are written by Jordy and I, in addition to top tech headlines and the timeline's best posts. Sign up for free at tbpn.com.

0:47Eric Siu:Okay. So I want to explain what I just played over here. So we did the eBay video first. There's that interaction. And then they basically clipped that part. And I call this a mid-form clip where it's like three to ten minutes or so. and it's horizontal, it's not vertical. These tend to do pretty well on Twitter or X. You see this one has 644 ,000 views. So that's 644 ,000 impressions that you have for a post roll over here to get people onto their newsletter and it kind of advertises their show too. And so I think we're gonna see more of this and I wanted to test this as an example for kind of the work that we're doing right now, right?

1:21Eric Siu:So if you go to, I'm looking at my page right now. um i think this one is maybe it's with you as well not bad okay look neil so there's a there's a video of neil here with his kid's uh laptop decorating it and then this is us talking about anthropic as a single growth market this is from this podcast neil okay two minutes over here 54 000 views that's not bad right yeah it's not bad yeah so you got you got two here so my point of saying this is like you have 1100 bookmarks 535 likes um i think there is this one's 1.7k i'm looking over here 9 10k over here uh 2.2k in fact whoever wants to advertise on this podcast the next advertiser will have to pay for these impressions as well because we will also stack these on so um 18k on that one not bad right so my point of saying all this is that um if you're trying to grow on like x for example the reason i think tbpn did so well is because they were selling these impressions especially on x and you know you have very tech forward people listening

2:19Neil Patel:to this stuff right so uh what do you think about this it's not a bad way to monetize but with when their ad, I always saw go subscribe to their website. I didn't hear them pitch another company or product or service. I saw other companies.

2:31Eric Siu:So I think it just depends on what you see. Like last

2:33Neil Patel:time I tried to show it, I couldn't find it. No, no, no. The one you just played right now, it wasn't a pitch of another company. It was just subscribe to their own channel. I've seen them pitch other companies. Oh, I got it. You're saying they rotated up. So it's random.

2:44Eric Siu:Yeah, exactly. Yeah. So we should definitely do that. You know, what's funny for this podcast, Neil, I have to record the podcast for you or the podcast ads for you promoting your company because you won't do it for yourself. So if you would ideally do it for yourself, we can include yours as well. I can do it. Just tell me what you want me to record. Uber Suggest. I'll just tell you right now. Uber Suggest, Answer to Public, and MP Digital. Yeah. You can just make like 3.30 seconds at the end. Please don't do it when you're traveling. Do it in like a nicer... 3.30.

3:18Neil Patel:Okay, I sent myself a note. Oh, with video or no video?

3:23Eric Siu:I think you should do video because we want it to be horizontal.

3:26Neil Patel:Okay. Cool.

3:27Eric Siu:All right. Because I think we're going to get a lot more views this way. Anyway. Okay. So let's talk about the next topic here. So a lot of people are talking about token maxing. Okay. So, you know, I've been watching some videos. Everyone's like, yeah, you should token max. What token maxing is first and foremost is spending as much as you can on tokens. Okay. So here's the uncomfortable truth about token maxing. Simple execution beats clever strategy when timing is right. So what that means is if you spend on token maxing, like let's say Neil says, oh, Eric, if you work for me, you have to spend as much as possible.

3:57Eric Siu:I would just run my tokens on stupid tasks all day. I may just have an agent just to hit that number so I don't get fired. Okay. But if you say just token maxing alone is pretty stupid because it creates perverse incentives. When you create a metric like this, you have to have a pairing metric. And so a pairing metric means, sure, you can try to token max, but maybe every time, at the end of every month, you have to go to your manager and say, hey, here's all the things that we built. Here's how it helps customers or here's how it gets us customers. Because if you don't have a pairing metric there, it's going to just drive a bunch of compute up.

4:29Eric Siu:You're going to pay an arm and a leg and you're going to get nothing from it, from your organization.

4:34Neil Patel:Dude, I totally agree. I don't understand why people would want to just juice up their cost. Like it doesn't make any logical sense other than their bosses looking at it as a way of, did you use AI? And we can see based off of your spend, I think that's just a terrible way. They should start looking at things like, what tasks did you actually complete? What were the results from it? What's the ROI? Did it reduce churn or increase LTV or repeat purchases? And I genuinely believe that's what a lot of the data and analytics teams will start looking at or CIO or CFO. They'll start grinding into the numbers because you can't just say in marketing, oh, we're all spending 5 % or 10 % more of our marketing costs in total because of AI.

5:18Neil Patel:Oh, what are we getting for that? Who knows? But look at this spend. People are just going to be pissed. Yep.

5:24Eric Siu:So again, I don't think we're saying don't look at your tokens. I think we're both saying that look at your tokens, absolutely, but your token spend. But you have to make sure that you're working closely with your team because if unmanaged, it's just going to go all over the place. speaking of which neil um my my token cost got up to basically like a twelve thousand dollar a month run rate um and i was like oh my god this is crazy so what i did was i literally all you have to do now for neil if you want to cut it to zero for yourself is you're paying for the cloud max subscription two hundred dollars a month you can even pay for the chat she'd be two hundred dollars a month the important thing is you create a long-term token which will last for a year and use the cloud cli command line interface for that you literally you can just go to your cloud and say, how do I make a one-year token?

6:05Eric Siu:You create that token, and then you just run your whatever you're using, like an open claw or whatever, and that will basically cut your cost. I cut it down to 87 cents, from$400 a day, Neil, to 87 cents a day.

6:18Neil Patel:Yeah, that's awesome. You shared that last week, or was it the week before? Where the issue, for a few-day period, it started, or one-day or two-day period, it started rising again. It's not up to$400, so I fixed that,

6:29Eric Siu:and now officially it's on the clawed CLI, or you can use OpenAI OAuth. I will say another thing, Neil, that's funny about this stuff is, let me just ask you right now, let's see where you're at. What do you think is like the model that's ahead in the world right now? The number one model, AI model.

6:46Neil Patel:I would say it's Anthropik who's winning right now, just based off of your valuation and how many people want to buy their stock and how many people in my organization use Claude versus any other company's products. Like they have access in my organization, You have access to Microsoft's products, Google's products, OpenAI's products. But yeah, majority of my employees are using cloth.

7:11Eric Siu:Yep. So here's the thing. Would you would also agree that in the world, there's a little bit of a lag when it comes to adopting like the internet or email, things like that? Yes?

7:20Neil Patel:Yes, but the lags have gotten shorter and shorter over time. So for example, when it comes to AI, the reason, or let's actually go with e-commerce. The reason it really started picking up is everyone started having these devices and it made it easier to buy. If you start looking at things like AI, well, you don't have to get people on the internet as or when people had to get on the internet, not a lot of people had computers. Now everyone already has devices that plug right into the AI. So it's easier for human beings to adopt the technology at a much quicker pace. Yeah.

7:54Eric Siu:So let me tell you where I'm going with this, Neil. So a couple like very until very recently, everything was about Claude. There were marketing very quickly. It's like they could do no wrong, right? Mythos came out, you know, Opus 4.7, amazing, right? Oh my God, they're shipping constantly, co-work, all this stuff. Here's the thing, Neil, in the past couple of weeks or so, because I tend to live in this world, OpenAI is slowly taking the crown back, right? Everyone now on X is talking about Codex, they're talking about chat, TPT 5.5, they're talking about the slash goal commanders, all these things.

8:24Eric Siu:And so I think it's pretty funny that in AI, we're very promiscuous. There's a tug of war. All that matters in this world when you're talking about trying to stay at the cutting edge of intelligence is the product itself, right? Nothing matters more. One or two weeks, three weeks ago, I would just be talking about Claude all day. And now I'm like, oh, man, this OpenAI has made a comeback. I will gladly switch over to it. So it's like there isn't really a defined moat quite yet.

8:51Neil Patel:I'm not seeing it yet. It's coming soon. I genuinely believe it's coming soon, and I think the winners are going to be Microsoft and Google. because if you look at the technology right now, it's improved over time. When AI first came out, it's drastically improved from then to now. But in the earlier days, you saw much bigger leaps in the technology. You give it two, three, four years, the versions that keep changing, I don't think they're going to be leaps and bounds better each new cycle. and I believe the Microsofts and the Googles are going to be like, it's included with your subscription for your company and it's free.

9:32Neil Patel:And I believe that they will just dominate and take over a lot of the corporate spending, which is where Anthropic is growing extremely fast due to the fact that they already have the customer base and they'll take free overpay.

9:43Eric Siu:Real quick, if acquiring customers has been a struggle for you and you are trying to figure out how AEO works, Answer Engine Authentization or the new version of SEO, how paid works, how all this AI stuff is going to play into your customer acquisition strategy then check out my ad agency, Single Grain. It's singlegrain.com. And if it looks like it's a good fit, we'll help you with a free marketing plan. So again, go to singlegrain.com and we'll see you on the other side. Yeah, I'm trying to pull up a chart where it shows AI intelligence compounding over time, where basically it's right now at genius level and it's gonna continue to get stronger and stronger.

10:13Eric Siu:So I'll try to pull that up in a little bit, but let me just show you something, Neil. So we're talking about, Neil talking about Microsoft and Google being the winners in AI. There's a big reason why that's important, because when you look at Google and you look at Microsoft, they have the most distribution, right? It's distribution that matters, especially distribution is getting harder and harder in an AI-driven world where you can make whatever you want. You want to be able to control that distribution. And Microsoft, they have those enterprise contracts locked down. Google as well. In fact, Google kind of has the whole stack.

10:45Eric Siu:They have the Tensor processing units. They have Search. They have Android. They have Gemini. They have what else do they have, Neil? They have Gmail. They have YouTube. They just have all the distribution in the world. They have all the data in the world, and they're going to make use of that. So obviously, they have Google Ads too. And then Microsoft, not too bad themselves. They're both multi-trillion-dollar companies. So you were just speaking about, Neil, Anthropic and OpenAI. I just want to call something out here. So you look at this here. I'm going to share my screen real quick. So let me share my screen.

11:16Eric Siu:Let's go over here. So Anthropic has decided to start a$1.5 billion joint venture with multiple Wall Street firms. So you got Blackstone in there, you got Goldman Sachs in there, they're all major investors. And basically, this is from Wall Street Journal, Anthropic Nears$1.5 billion joint venture with Wall Street firms. So Anthropic, Blackstone, Hellman, and Friedman and Goldman Sachs announced the formation of a new AI services company. The organization will work with mid-sized companies across sectors to bring Cloud into their most important operations. Applied AI engineers from Anthropic will work alongside the firm's engineering team to identify where Cloud can have the most impact, build custom solutions, and support customers over the long term.

11:57Eric Siu:So the company is backed by these leading companies. Oh, look, Apollo's in here. Sequoia's in here as well. These are General Atlantics in here. These are major firms, okay? So why is this important? People might be thinking, oh, well, first of all, first and foremost, Anthropic and OpenAI are doing this. That means that everything still comes back to services at some point. And you might be thinking, oh, I run an agency. Now I have no chance. No, this actually reinforces that people need agencies. They need services companies to help with implementation here. So I think this is a net positive thing.

12:28Eric Siu:It's not a negative thing, right? There's a lot of things that I see online right now where people are talking about building these single brains or company brains and all these things. and that reinforces the path that I'm on. But also when I look at Neil's agency as well, it's not like this stuff is going away. In fact, they're going to need it more because I think Anthropik and OpenAI, they're going to try to go with, their engineering resources are going to focus more so on the enterprise market, right? It could be a lower market enterprise or higher enterprise, but there's still a lot of room.

12:56Eric Siu:There's still more customers than ever. And there's going to be a lot more entrepreneurs, I believe as well. So I would try to double down, triple down, especially if a services business.

13:04Neil Patel:Yes. and services now, I think, is going to explode more and more because of all the noise that's around it right now and all the announcements, right? Like it's becoming, quote unquote, sexier, at least temporarily.

13:17Eric Siu:Yeah, I mean, look, what is it? Sequoia, Andreessen Horowitz, Ycommoner, talk about this, the new$1 trillion company is a services firm, right? Services as a software. So that's why I'm more excited. I'm excited for Neo. I'm excited for myself. This has never been a better time to do business, I believe.

13:34Neil Patel:yeah and uh what was the amount that they all raised open ai did a joint venture with someone i forgot what the dollar i forgot how much they raised yeah but it was in the billions and i'm assuming i think anthropic was five right five billion uh for the joint venture one point one point five oh one point five maybe the other one was five billion yeah let me see so open ai raises money for services yeah that's right anthropic was one point five the other one was which you just covered but the other one was five billion i think i could be wrong the deployment company

14:01Eric Siu:Okay, yeah, I see it over here. So OpenAI has raised over$4 billion for a new joint venture focused on helping businesses adopt software. So who's in here? You got the other side, TPG, Brookfield Asset Management and Bain Capital, all the biggest companies, right? In terms of investment companies. They're spending. Yep. Enterprise growth, by the way, enterprise revenue for OpenAI now makes up over 40 % of total revenue with targets to reach parity with consumer revenue by end of 2026. So I think we thought like, at least I was like, oh man, OpenAI is really falling behind. And then boom, before you know it, they're back.

14:31Eric Siu:Right. Let's just see how that lawsuit goes. Yeah.