Microsoft Corp. (NASDAQ:MSFT) CEO Satya Nadella warned employees against AI overuse, urging cost-efficient model selection as rising infrastructure costs pressure Big Tech to rein in token consumption.

“I’m a tokenmaxxer too, it’s addictive,” Nadella said, speaking at The New York Times’ “Hard Fork” podcast. “But you have to step back when the novelty wears off.”

He urged workers to match tasks to the right model. “Don’t use frontier models for non-frontier problems,” he said, pointing to Microsoft Copilot’s auto mode as the solution.

AI Efficiency Now A Strategic Priority

Several reports indicate Silicon Valley firms spent 2024 incentivizing maximum AI usage via internal token leaderboards. Now, with rising infrastructure costs, efficiency is replacing volume as the benchmark.

Nadella echoed that shift, saying AI use must generate value, not just volume. “It can’t be a race to doing things that just don’t add value,” he said. Venture capitalist Chamath Palihapitiya made a similar case this month, warning that corporate teams are defaulting to the most expensive AI models and “burning through massive budgets with zero governance,”

Nadella also added that he recently vibe-coded an AI tool that monitors workplace conversations and autonomously updates connected code projects.

The comments underscore Microsoft's broader restructuring efforts, including leadership changes introduced in late 2024 to streamline its 220,000-person workforce and strengthen its AI competitiveness. The company said in its third-quarter results that more than 300 customers are expected to process over one trillion tokens through Microsoft Foundry this year.

Trading Metrics, Technical Analysis

Microsoft has a market capitalization of $2.95 trillion, with a 52-week high of $555.45 and a 52-week low of $356.28.

The technology stock has declined 17.84% year to date.

Price Action: MSFT closed the regular session on Wednesday at $397.36, down 1.50%, according to Benzinga Pro.

With a Quality score of 93.83, Benzinga's Edge Stock Rankings indicate that MSFT has a negative price trend across all time frames.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.