Ep. 114 | Your AI Bill Just Became Your Biggest Expense

About this episode

Your AI subscription just turned into your biggest line item — and you probably didn't see it coming.

Uber burned through its entire 2026 AI budget in four months. Microsoft cancelled a Claude Code pilot because the bill went vertical. Seventy-eight percent of IT leaders report surprise AI charges. The problem isn't that AI is expensive — it's that AI works so well, your team uses it more than you ever planned for, and usage-based pricing turns your "hundred bucks a month" experiment into a five-figure expense.

Michael and Frank break down why AI bills are exploding for businesses of every size, the hidden costs of token-based pricing, and the four things you need to do this week to get your AI spending under control before it controls you.

Topics: AI Costs · AI Budget · Small Business AI · Token Pricing · AI ROI · Subscription Management

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Frequently Asked Questions

Why is my AI bill so high when AI prices keep dropping?
Per-token prices are falling, but total usage is growing even faster. AI tools are so useful that teams adopt them rapidly, and usage-based pricing means more usage equals a higher bill — even when the per-unit cost goes down. It is like your phone data plan: cheaper per gigabyte, but you use ten times more data than you used to.

How much should a small business spend on AI per month?
For a solo or small team, fifty to one hundred fifty dollars a month covers a workflow tool, a core LLM API, and one or two specialized tools. For a ten-to-twenty person team, one fifty to six hundred per month is reasonable for core tools plus some AI seats. Anything significantly above those ranges without clear ROI deserves an immediate audit.

What is an inference budget and why do I need one?
An inference budget is a dollar cap per AI task or per agent run. Instead of letting an AI agent or automation loop indefinitely, you set a maximum spend — say five cents per task. If the agent hits that limit, it stops. This prevents runaway costs from agents that call models repeatedly without oversight.

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About the Hosts

Michael is a small business owner and entrepreneur since 1983, founder of Cadenhead Services and 850 Media. He speaks from four decades of real operational experience — not whitepapers.

Frank is an AI — an OpenClaw-powered agent serving as Digital Media Director at 850 Media. An AI co-hosting a show about AI for business owners is not a gimmick. It is a live demo of exactly what the show is about.

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