The hidden costs of artificial intelligence: Are you paying attention?
According to an August 2026 article in Business Insider, a Microsoft employee ran up $28,000 in artificial intelligence charges in 28 days without buying anything.
He was using AI tools to do his job, and the company was billed for what the industry calls tokens. A token is a small unit of work: you ask one of these systems a question, it breaks the question into pieces and works through them, and each piece is a billable token.
AI tokens make up a new kind of business expense that companies are beginning to budget for. Individual users will eventually see this cost, too, even though most AI tools are still free or nearly free.
I recently encountered this myself when I hit a usage limit on an AI tool in the middle of a project. Not wanting to wait five hours for the allowance to reset, I told it to bill me for the overage. It only took 15 minutes to burn through nearly $50. Because I had notifications turned on, I could see the meter running and shut down the program.
Without that real-time notification, I might have gone merrily on my way until I finished my project, then been shocked when I realized what it had cost. This may well be what happened for the Microsoft employee who ran up the headline-worthy tab.
Tokens, like subscriptions and utility bills, are metered money. If I buy a five-dollar cup of coffee and swipe a card or hand over cash, I actively participate in the transaction. Metered money, by contrast, runs up in the background. We tend not to notice it because we are not deliberately deciding to spend it in the moment.
If you are among the many people beginning to use AI tools, be aware that at some point you will need to budget for them. Here are few ideas to help you avoid expensive surprises.
Be aware that paid AI services are likely to follow the same patterns as other metered services. A subscription model is a series of small yeses. This app or that service seems worth trying out for a small amount. Then, even if we don’t continue to use it, it keeps renewing until we notice that we’re paying for something we’ve forgotten to cancel. These systems are built so that paying takes no effort, which is exactly why the charges go unnoticed.
The pattern especially worth watching is the free tier that turns into a paid one. Metered services often start out free or at a low cost. The price then increases once you have built the habit of using the service.
Token billing will be even harder to plan for than subscriptions, because it is not a fixed or predictable monthly amount. It moves with how much the tool gets used, which makes it easy to underestimate.
If you are a fan of AI, how can you use it and also protect your budget? First, research any tools you might use so you understand the potential charges. Then set a number now for what these tools are worth to you in a month. Put any metered charges on one card, so you’ll have a monthly total you can see.
Budgeting in advance means making an active, deliberate decision. If you wait for the statement and react, you are passing judgment on yourself after the fact. This rarely changes what anyone does the next month.
For many people, AI tools will be worth paying for. However, it is wise to decide, before any bills arrive, how much in very real money those tools are worth to you.
Rick Kahler, CFP®, CFT™, is a pioneer in financial therapy and a 2026 inductee into the Financial Therapy Hall of Fame. He is the founder of The Financial Therapy Podcast and Kahler Financial Group, and co-author of “Coupleship Inc.” and “The Financial Wisdom of Ebenezer Scrooge.
The information provided is for educational purposes only and should not be construed as investment advice. The views expressed are subject to change based on market or economic conditions. Past performance is not indicative of future results. Any reference to potential benefits is illustrative and may not apply to your individual circumstances. You should consult with your financial adviser before making any investment decisions. KFG, LLC is an SEC-registered Investment Adviser.
Photo: public domain, wikimedia commons
The South Dakota Standard is offered freely and is supported by our readers. We have no political or commercial sponsorship. If you'd like to help us continue our mission to advance independent political and social commentary, you can do so by clicking on the "Donate" button that's on the sidebar to your right.
