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Back to 20VC: Horizontal vs Vertical Agents: Who Wins | Model Routing: Commodity or Increasing in Value | The Future of the Inference Market | Why Founders Should Take Discounts for Tier 1 Firms with Harrison Chase, LangChain, with Harrison Chase.

Why Are AI Bills Rising Even as Models Get Cheaper?

Harrison Chase says AI bills rise because agents burn far more tokens, even while frontier models get cheaper on price for performance. Cost is one of the main things companies ask about. Frontier models are relatively cheaper over time than what existed a year ago, but agents talking to agents, and multi-agent systems, burn so many more tokens that the bill still goes up. Coding costs have skyrocketed, and many organizations, including LangChain, are looking for ways to pull those costs back.

Coding agents get three controls. First, show admins what a run will cost and what it has cost. Second, cap a task, such as getting a reservation without spending more than $5. Third, change the harness. Most harness work so far has chased accuracy, the biggest blocker. As cost becomes the worry, prompt caching cuts the bill, and model providers now let a harness add tools in the middle of a run without busting the cache and sending the cost up.

Transcript

20VC: Horizontal vs Vertical Agents: Who Wins | Model Routing: Commodity or Increasing in Value | The Future of the Inference Market | Why Founders Should Take Discounts for Tier 1 Firms with Harrison Chase, LangChain ·

The Twenty Minute VC: Venture Capital | Startup Funding | The Pitch

More from this episode

  1. Should I Take a Sequoia and Benchmark Discount?Harrison Chase says it is absolutely worth taking a discount for Sequoia and Benchmark.
  2. What Is the Hardest Part of Building AI Agents?Harrison Chase says the hardest part of building agents is getting the system to behave reliably. Models are non-deterministic black boxes.
  3. Will Model Labs Eat the Agent Harness?Harrison Chase says the agent harness should stay neutral, so the memory and context an agent builds are not locked to one model lab.
  4. Why Do Domain Experts Win With Vertical Agents?Harrison Chase says a founder should start a vertical agent at the harness layer, doing context engineering before any post-training of the model, because…
  5. Why Hasn't Anyone Solved AI Memory?Harrison Chase says the hardest part of AI memory is the intelligence that decides what to keep, not the database.
  6. What Kind of Agent Do Most Apps Need?Harrison Chase says most apps probably need a vertical agent of their own.
  7. What Share of Engineering Salary Goes to Coding Tools?Harrison Chase says they spend roughly 30% of engineering salary on coding tools.
  8. Should Companies Fear Open Source Chinese Models?Harrison Chase does not think fear of open source Chinese models is justified. Some enterprises are fearful of working with open source Chinese models.
  9. Should Founders Discount for Sequoia and Benchmark?Harrison Chase says taking money from Benchmark changes a company's trajectory completely, and a discount is absolutely worth it for Sequoia and for Benchmark.

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