Mercor’s CEO says the $10 billion startup now spends more on AI tokens than employee pay.
Before long, he says, the average company could be spending more on AI compute than on salaries.
Some tech leaders are questioning whether soaring AI costs are producing returns.
What happens when a company spends more on AI than on its workers? Mercor’s CEO says his startup is already finding out.
“Right now we’re spending more on tokens for our internal agents than we are on employee head count,” Foody said during an appearance on the “20VC” podcast on Monday.
When host Harry Stebbings asked if Mercor’s token spending on AI agents exceeded salaries, Foody replied: “That’s correct. It’s pretty incredible.”
Mercor — a $10 billion startup that helps companies such as OpenAI and Anthropic train AI models through a network of its human experts — has become one of the fastest-growing companies in the AI ecosystem since its 2023 launch.
As of October 2025, per PitchBook, it had around 300 employees. The company did not respond to a request for comment.
Foody said Mercor uses AI agents across a wide range of functions, including project management, recruiting, accounting, fraud detection, and candidate evaluation. The company has conducted more than 5 million AI-assisted interviews, he said.
The executive believes Mercor’s spending patterns foreshadow a broader shift across corporate America.
“I would bet that in five years the average enterprise spends more on compute than headcount,” Foody said.
When AI costs more than employees
Foody’s comments come amid a broader debate among executives over whether rising AI spending is translating into meaningful business returns.
Uber COO Andrew Macdonald recently said he has yet to see a clear link between rising AI spending and proportional productivity gains.
Foody said that falling costs and rapidly improving model capabilities are driving a Jevons paradox-style effect, where cheaper AI leads to significantly more consumption rather than less.
He said Mercor measures the performance of different AI models for specific business tasks and evaluates whether newer models offer better value.
The result, he said, is a future in which AI becomes a core operating expense for companies, potentially rivaling or surpassing the cost of human labor itself.
“Humans will still play an important role at the things models can’t do,” he said. “But I expect that cost of inference, cost of compute will exceed that.”
The author stressed before leaving for a 10-day trip about her 11-year-old.
Courtesy of the author
While I was traveling to Greenland, my son unexpectedly became independent.
He started taking the bus and making his own lunches without me.
The experience gave both of us more confidence and freedom.
I love to travel, but I rarely take solo trips because it’s hard to be away from my family.
I miss my children when we are apart, but the practicalities of packing lunches and shuffling kids to school and soccer practice are a bigger hurdle than homesickness. I like to think that everyone in my family needs me. However, my youngest son, aged 11, is still in elementary school and relies on me to make his lunches and get him to and from school. I am always particularly worried about how he will get by without his Mom when I am away.
Despite my initial hesitation, I recently took a trip to Greenland to mark a milestone birthday. The trip was a dream for me, full of glacier hiking and exploring a remote part of the world that’s not yet overrun with tourists. I planned to be away for 10 days, which seemed like an eternity, but I decided to do it anyway.
I planned ahead so things at home would run smoothly
To prepare my family for my absence, I left detailed notes about everyone’s daily schedule. I baked lasagnas, created a meal plan, shopped for ingredients, and pre-made a handful of packed lunches. I called in favors to make sure my son had rides to and from school every day, and left my husband the names and phone numbers of the parents who agreed to pitch in to help with childcare and shuttle our son around while I was gone. Just getting everything in order was exhausting and took hours.
It turns out I didn’t need to worry.
My son started being more independent while I was away
About midway through my trip, I called my family to check in. “You should probably tell Mom what I’ve been doing, Dad,” I heard my son whisper.
It took some prodding, but I discovered that while I was gone, my husband started sending my 11-year-old to school on the public bus, and that my son had started making his own lunch. Once, when a friend got stuck at work and couldn’t pick him up as planned, he took the bus home too.
When I expressed concern about this abrupt change, my son insisted that he was a big boy and could handle it. He hadn’t been late to school once, and he hadn’t gone hungry. I was unsure about all of these changes, but I wasn’t there to stop them.
When I returned, I assumed things would return to normal. My son insisted on taking the bus, although he said he “wouldn’t mind” if I kept making his lunch. I agreed to keep packing lunches and even enjoy showing him love in this way, knowing that he is growing up very quickly. Nevertheless, he now often wakes before me and packs his own lunches anyway.
I still worry, and make sure my son can stay in touch when he’s out in the big, wide world alone. He has a phone he can use to check the bus schedule and maps, and to text me when he arrives at school or gets on the bus to come home. Although giving my son so much independence so quickly wasn’t the plan, he rose to the challenge and is thriving.
My son’s newfound independence is better for both of us
Since I’m no longer driving my son to and from school and packing lunches every morning, I’ve added about an hour and a half to my day. Giving up this time with my son has been bittersweet, but time has shown that we are both ready for the change.
Getting out the door in the morning used to be the most stressful part of my day, and I’ve enjoyed the slower pace. I use the extra time I have to myself to start exercising more and planning healthier meals. I’ve managed to see friends more, too, for morning walks or lunch dates. I’ve been wanting to do all of these things for a while, but I hadn’t managed to fit them in between work, household, and childcare responsibilities.
I’m not sure what the next leap in independence will be for my son. However, this experience shows he’s been ready for more responsibility before I was ready to give it to him. And I was ready for it, too.
Satya Nadella defended Microsoft’s AI data center plans amid community backlash at Build keynote.
Microsoft’s AI infrastructure aims to address environmental and economic community concerns.
Microsoft is spending heavily on data center expansion.
Microsoft CEO Satya Nadella used a conference keynote on Tuesday to defend against one of the biggest challenges to the company’s massive AI datacenter buildout: Community backlash.
AI data centers have become such a political flashpoint that more people in a recent Gallup poll said they’d rather live near a nuclear reactor. The data center boom has received criticism over growing power costs, environmental concerns, and the potential impact of AI on jobs.
Microsoft in January released a plan to build what the company called “community-first” AI infrastructure, making promises including that its data centers won’t raise electricity rates for residents.
“How do we ensure that the DCs do not increase electricity prices, making sure that we are replenishing all our water use, creating jobs in the local communities for the local residents, adding to the tax base, making sure we’re strengthening the communities by investing in local training and the nonprofits in the area?” Nadella said at Microsoft’s Build conference.
“Only when we live up to these principles, do the hard work around it, is when we earn the permission to go ahead and innovate and build,” he added.
During Tuesday’s keynote, Nadella said the company’s Azure cloud business spans more than 500 data centers in 80 regions, which he described as the “most expansive hyperscaler footprint out there.” Microsoft has added more data center capacity in the last 18 months than in the first decade of Azure, the CEO also noted.
Building these facilities, and packing them with AI chips, networking equipment and other gear, is hugely expensive. The biggest cloud providers are on course to spend hundreds of billions of dollars this year on data centers. Meeting Microsoft’s recent pledges could add to this cost.
During his talk on Tuesday, Nadella said Microsoft is using a cooling loop for its data centers that is filled once, which helps the facilities operate with almost zero water consumption.
“In fact, the daily water usage over the course of an entire year is roughly equivalent to what a single restaurant would use,” Nadella said.
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The Dunkin’ tote I got free with the purchase of a half dozen donuts.
Katie Notopoulos/Business Insider
Dunkin’ gave away free tote bags this week. I coveted one. And got one.
Dunkin’ has done cheeky and ironic merch drops like track suits and wedding ring boxes.
People have an affinity for the brand with Northeastern roots in a way they don’t for Starbucks.
On Monday, I called a few of my local Dunkin‘ locations to ask if they still had the free tote bags available with the purchase of a half or full dozen donuts. One location was very confused by the call, one didn’t answer, and one said that yes, they had just one in stock. I raced over, and to my relief, I secured the bag.
The free tote was a limited-time promotion. Locations only got 20 bags each. It’s not the first Dunkin’ merchandise promotion, and certainly not even the most exciting. A branded tote bag is one of those things that you accumulate in life — not necessarily something you seek out.
But there was just something about the Dunkin’ tote that called to me. As far as totes go, it’s handsome. It came in pink or orange straps against white, an L.L. Bean-influenced style. I felt something deep in my bones, my soul, that I had to have it.
What was it about this tote back that activated something in me? Stanning a brand is cringe (see: Disney adults), and I live in fear of being cringe. So what made this different for me?
I have a few ideas.
Dunkin’s merch strategy works on Gen Z
The marketing for Dunkin’ has leaned into viral moments and Gen Z appeal in the last few years. In 2020, Dunkin’ got TikTok star Charli D’Amelio to act as spokesperson and sold viral donut-scented candles. Its menu is full of sweet iced drinks that chase trendy flavors like matcha and ube. Dunkin’ recently jumped on the “dirty soda” trend, combining Pepsi and coffee milk. (I tried it, along with some of its other newest drinks, and found it fairly disgusting.)
Part of this push to Gen Z is with limited merch drops over the last few years (young people love a “drop”). This winter, Dunkin’ gave away a single pink mitten to keep your hand warm while holding an iced coffee, a playful nod to the Northeast tradition of consuming iced coffee even in winter. (While this may have once been a New England thing, the rise of iced beverages is nationwide, and since 2021, iced drinks have outsold hot ones at Starbucks, even in winter months.)
Earlier this spring, Dunkin’ gave away a pink wedding ring box (with purchase of 25 or more Munchkins) as part of its “I Dough” collaboration with Vera Wang. The collection, available online, was bridal-themed, including a white silk robe and pajama set with little cups of iced coffee on the sleeves.
A spokesperson for Dunkin’ told me the brand leans into the playful aspect of its personality and believes its fans appreciate being in on the joke.
New England runs on Dunkin’ merch
Regional pride is certainly a factor here. Dunkin’ started in the Boston suburbs in the 1950s, and now has more than 14,000 locations worldwide, but the Northeast US still has the highest concentration of stores. Although its headquarters are still in Massachusetts, Dunkin’ is owned by the conglomerate Inspire Brands, which also owns Buffalo Wild Wings, Jimmy John’s, and Arby’s. In May, Inspire Brands confidentially filed for an initial public offering.
I’m not immune to all this, having grown up in New England, where Munchkins and a Box O’ Joe were a simple part of the fabric of life. Even so, I didn’t really think of Dunkin’ as being so aligned with Boston and New England until the last decade or so, when there seemed to be a shift in the public consciousness about Dunkin’ being part of the Masshole identity. Whether this shift was organic or pushed by Dunkin’s own marketing, it’s hard to say.
In 2024, Dunkin’ sold limited editions of the “Dunkings” tracksuit worn by Ben Affleck, Matt Damon, and Tom Brady in a Super Bowl ad. The suits sold out in minutes. The Massachusetts governor wore the tracksuit to an event. Affleck and Damon, who have lived in Los Angeles for nearly their entire adult lives, appeared in more Super Bowl spots for the chain in 2025 and 2026.
A friend has a Dunkin’ “D” door in her apartment in Queens.
Katie Notopoulos/Business Insider
The ironic love of Dunkin’: It’s kind of bad
There’s something about Dunkin’ that engenders love and a fandom unlike, say, Starbucks. People love Starbucks, sure. But they don’t typically wear Starbucks tracksuits or bucket hats. (Starbucks is the US’s No. 2 restaurant chain — behind McDonald’s — with more than $29 billion in consumer spending in 2025, which was up 2% from the previous year, according to a report from EMARKETER, Business Insider’s sister company. Dunkin’ is No. 5, with nearly $13.5 billion in spending, up 5% from the prior year.)
There’s also a layer of irony in the love of Dunkin’ that’s different from loving a “good” coffee shop.
Dunkin’ is, and I say this with great affection, kind of crummy. Dunkin’ does not aspire for that high-end coffee shop experience that Starbucks is going for. The interiors often leave a little to be desired, the food’s consistency is questionable, and the coffee is love-it-or-hate-it.
That lower pretension and lower price point are part of its appeal. I would go so far as to say that its humble reputation holds particular sway among its New England fan base, where there are deep cultural taboos against displays of flashiness or luxury. There are, of course, status symbols that denote New England class striations, but these are often subtle and hard for outsiders to parse. Something as overt as loudly announcing your love of expensive coffee (expensive coffee certainly exists there!) would violate local norms.
This is my first piece of Dunkin’ merch, even after decades of happy Munchkin consumption. My colleague Juliana Kaplan owns a Dunkin’-inspired T-shirt. A Dunkin’-loving friend who grew up in Massachusetts was given one of the pink “D” door handles from an actual Dunkin’ location as a housewarming gift when she bought an apartment in Queens. There’s just something whimsical and silly about Dunkin’ merch that people love.
I am already using my Dunkin’ bag (I like to think of it as a Dunkin’ Birkin, or what I call … a Dunkin) and have already received compliments on it.
A day later, totes are selling for $30 to $50 on eBay, and other limited Dunkin’ drops are selling for even more. I’ve seen the single mitten for $75 on Facebook Marketplace, and a hat that was given out at Fenway Park with the Red Sox’s “B” logo on an iced coffee is going for $75-plus.
Employees are feeling “uncertainty and pressure” in a time of “intense” change, the memo said.
Microsoft employees are feeling more “energized” and “empowered” to do meaningful work, and worse about coaching, feedback, and motivation from managers.
That’s according to a recent internal memo that highlights the results of the company’s latest employee surveys.
In the memo, Microsoft Chief People Officer Amy Coleman shared what she called the “top strengths” and “top opportunities” from employee surveys.
“While much of this feedback is encouraging, I also know we are in a time of intense and exciting change. Many of you shared feelings of uncertainty and pressure as the work evolves,” Coleman wrote in the memo, which was viewed Business Insider.
“The leadership team and I hear that, and we’re committed to being more transparent, communicating more frequently, and giving context wherever we can,” she added.
Employee Signals
In Microsoft’s twice-yearly “Employee Signals” survey, employees responded most favorably to the following questions:
I prioritize addressing security challenges in my role: 88 (+1 compared to the last survey)
I feel included in my team: 86 (+1)
My team acts in ways that reflect Microsoft’s culture: 86 (new question)
And least favorably to the following:
I have opportunities to broaden my experience in my current role: 79 (new question)
I have what I need to be productive in today’s work environment: 80 (+4 compared to the previous survey)
I see a clear link between my work and my org’s objective: 81 (new question)
Managers and leaders
In a separate annual survey focused on managers and leaders, 85% of employees answered favorably to a question about whether they’re confident in their manager’s overall effectiveness, the same percentage as the previous survey.
Employees responded most favorably to the following:
(Manager’s name) embraces new challenges to drive innovative solutions: 86 (+1 compared to previous survey)
(Manager’s name) creates an inclusive environment where everyone can do their best work: 86 (-1)
(Manager’s name) invites different perspectives and works to align our team: 85 (0)
And least favorably to the following:
(Manager’s name) coaches me through challenges in my day-to-day work: 76 (-5 compared to the last survey)
(Manager’s name) gives clear feedback to help me improve: 79 (-4)
(Manager’s name) motivates me to do my best work: 82 (-2)
Microsoft declined to comment.
Read the full memo:
My goal is to have an ongoing, open conversation with you about what it’s like to work at Microsoft. Today’s post is part of that, sharing what we’re seeing in our H2 Employee Signals results so we can have a dialogue about what’s most important to you.
Your day-to-day experience matters, and so much of it is shaped by your manager and leader. At the same time, I want to be transparent about how things are feeling across Microsoft – what’s working, where we’re making progress, and where we still have more to do.
Thank you to the 71% of you who took part in Employee Signals and shared nearly 265,000 comments. It helps us better understand where we are as a company right now.
What the data is telling us
Our Thriving score, feeling energized and empowered while doing meaningful work, rose 3 points to 79, with consistent progress across every element.
Top strengths: A sharp focus on addressing security challenges, feeling included on teams, and teams working in ways that reflect our culture. When asked what helps you do your best work, comments pointed to empowerment, teamwork, culture, communication, and customer focus.
Top opportunities: Expanding experiences in role, making sure you have what you need to be productive in today’s work environment, and more clearly connecting your work to broader org objectives. Comments surfaced challenges around strategy, communication, processes, customer focus, and speed of execution.
While much of this feedback is encouraging, I also know we are in a time of intense and exciting change. Many of you shared feelings of uncertainty and pressure as the work evolves. The leadership team and I hear that, and we’re committed to being more transparent, communicating more frequently, and giving context wherever we can.
Manager and Leader Signals
In April, many of you leveraged our annual Manager and Leader Signals survey to share feedback with your manager and skip-level leader to help them grow.
Highlights include:
Confidence in your manager remained strong at 85.
The top strength for our managers is embracing new challenges to drive innovative solutions. At the same time, one of our biggest opportunities is strengthening how managers coach and support others through their day-to-day challenges.
Nearly 368,000 comments recognized strengths in clarity, empowerment, and driving results, while also pointing to opportunities around transparency, communication, and career development.
Thanks again for sharing your feedback.
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In several X posts on Sunday, the OpenAI researcher said young tech workers should test out different teams before anchoring themselves to one company.
His view: early-career engineers need data points — on research projects, culture, and their own market value — before making a long-term bet. He called the traditional stay-put advice “braindead.”
“Please don’t take the advice that you should stay at a company long and ‘not hop around’ for your first jobs,” he wrote.
please don’t take the advice that you should stay at a company long and “not hop around” for your first jobs
it’s absolutely braindead to decide on a long term bet with zero datapoints on what a good team looks like and long before you have priced yourself into the market
Recruiters have traditionally warned against job-hopping — or, relocating to new positions and companies every one to three years — because it can call a worker’s commitment into question.
Petersson said he doesn’t agree with that advice, suggesting that other young engineers instead take a fast approach to building their careers.
“Just tell people you are looking for internship or you want to ‘try working together for a month’ or say you’re a contractor,” he wrote, saying that hopping can result in “huge wins for everyone that all sides have information so you can price yourself in.”
Petersson himself hopped around before landing an AI research position at OpenAI in 2024, when he was 23, according to his GitHub profile. Before that, he worked as a software engineer at Dataland and Midourney for less than two years each, according to his LinkedIn profile. He dropped out of high school in Sweden at 17 to focus on building AI start-ups.
He isn’t the only tech personality to make the case for job-hopping. In April, when asked to grade some common career advice, Ryan Roslansky, LinkedIn’s former CEO, gave job-hopping for more money an “A.”
A tough job market raised the stakes for young workers
Still, the suggestions land at a tough moment for young workers, especially in tech. Tech companies, including Meta, Oracle, Microsoft, and Block, have announced major layoffs in recent months. Challenger, Gray & Christmas, a layoff-tracking firm, said that while fewer employers are cutting jobs overall this year, layoffs in the tech sector are up 40%.
But Petersson said some of the best engineers he knows spent years at early jobs that, in hindsight, were not valuable stepping stones. He gave the example of an engineer spending “2.5 years at a startup” after college, making $80,000, before later landing a multimillion-dollar deal.
He said that some workers do strike it rich by joining the right company early. He wrote that a small number of people end up at a frontier AI lab or as early engineers at fast-growing startups, making life-changing money.
“These are extremely rare,” he wrote. “Ask any great engineer and you’ll realize how many years they wasted with bad companies.”
Petersson and OpenAI did not immediately respond to requests for comment.