AI getting too expensive? Walmart starts putting cap on AI use for employees after rising cost
Walmart has become the latest company to limit AI use for employees as it faces rising costs. Previously, companies like Microsoft, Uber and Amazon have reportedly cut back on AI use for workers due to high costs.
AI tools promise higher productivity. AI companies pitch their products as a way of getting an employee to do more work within the same timeframe. But this productivity comes at a cost which might be a bit too much for some companies. Amazon, Uber, Microsoft have all cut back on AI tools for employees in some capacity recently, and now US retail giant Walmart has reportedly joined this list.
As per a report from Bloomberg, Walmart has started limiting employees’ use of its in-house AI assistant, Code Puppy. The report states that the AI tool had strong demand from workers, which is said to have increased costs for the company.
No more unlimited AI for Walmart workers
Now, the report says, Walmart employees get a token limit for Code Puppy – tokens act as a unit of measurement for AI. The more work you do, the more tokens you consume. Previously, the company provided unlimited Code Puppy use for its workers.
But what is Code Puppy? Before you ask, it likely has nothing to do with dogs. Code Puppy is reportedly an AI agent that was developed that helps workers do different tasks, such as filling spreadsheets or creating presentations.
As per a Walmart spokesperson, the company wants employees to use AI in ways that can create value, and to use the right AI for the right task. Apart from Code Puppy, Walmart employees are believed to have access to other AI tools like Claude and ChatGPT too.
Walmart’s decision comes at a time when the cost of AI tools has started to become a concern for companies. Previously, a report surfaced that one company may have spent $500 million in a single month on Claude usage alone.
Uber is among the companies that have publicly accepted this issue. The company is said to have rolled out Claude Code to about 5,000 engineers in January and exhausted its annual AI budget within months.
Microsoft has also been reported to be pulling back some AI offerings and asking thousands of engineers to move from Claude Code to an internal tool by 30 June, with reports linking the move to rising token costs. Though it is possible that the company simply wants to switch to its own AI tool.
Recently, platforms like GitHub are also switching to token-based usage pricing. This charges the company for the tokens used by their employees, which some users claim can lead to increased costs.