One of the most influential people in AI went on American television this week and said the way AI is sold to businesses is broken. Palantir CEO Alex Karp told CNBC’s Squawk Box that “something has gone completely wrong” with how frontier AI companies charge for their models, and described the arrangement as a wealth tax on the businesses using them.
He is talking his own book, and we will get to that. But underneath the theatrics sits a question every Australian business owner should be asking right now: is AI worth it for small business, or are you paying a monthly bill for something you have never measured?
Karp’s argument has two parts. The first is about cost. Businesses buy AI on a per-token basis (a token is a small chunk of text the model reads or writes, and you pay for every one). Costs scale with usage, usage scales with enthusiasm, and enthusiasm rarely comes with a measurement plan. Karp claims the CEOs he speaks to are privately furious about paying more and more for AI without a clear return. Some large companies, including Microsoft and Uber, have reportedly started capping staff access to expensive AI coding tools after budgets blew out.
The second part is about data. Palantir published a nine-point manifesto on AI sovereignty the day before the interview, arguing that businesses should keep ownership of their data, their models and their competitive edge rather than feeding all three into someone else’s platform. The pointed line from the manifesto: your data is your treasure, and you transfer it at your own peril.
Strip away the billionaire theatre and the complaint translates cleanly to the Perth SMB market we work in every day.
| What Karp said | What it means for your business |
|---|---|
| Token pricing is a wealth tax | Per-seat and usage-based AI subscriptions quietly stack up. Copilot here, ChatGPT Team there, an AI add-on inside your line-of-business software. Few businesses total it. |
| Enterprises pay for tokens that create no value | If nobody in your business can say what a specific AI tool saved or earned last quarter, you are one of the businesses he is describing. |
| Companies hand over their data and their edge | Staff pasting client contracts, pricing and financials into free AI tools is a data governance problem, not a productivity win. |
None of this means AI is a bad investment. We use it heavily ourselves and deploy it for clients through our AI services. It means AI is an investment, and investments get measured.
Here is the uncomfortable local data. MYOB’s research found that 82 per cent of Australian SMEs using AI report a positive impact, but 46 per cent do not measure that impact at all. Nearly half of the businesses saying AI is great cannot show you a number.
That is exactly the gap Karp is pointing at, and it is fixable. The businesses getting genuine returns from AI share a pattern we see repeatedly in our AI assessments: they picked two or three specific workflows, put a baseline against each one, and reviewed the spend the same way they review any other supplier. The businesses getting nothing bought licences because a competitor did, rolled them out with no training, and never looked at usage reports.
A simple test. For every AI subscription you pay for, can you name the task it does, the person accountable for it, and the hours or dollars it saves per month? If the answer is no on any of the three, that subscription is on notice.
The sovereignty half of Karp’s rant deserves just as much attention, because it is the half small businesses ignore.
Every prompt your staff type into an AI tool is business data leaving your environment. Under a properly configured business plan with the right settings, that can be acceptable. Under a personal free account signed up with a Gmail address, it is not. This is shadow AI: tools your team uses that nobody approved, nobody configured and nobody can audit. In almost every business we assess, we find more AI tools in use than the owner knew about, and there is something unsettling about discovering your conveyancing precedents have been living in a free chatbot account for six months.
You do not need Palantir’s budget to take data ownership seriously. You need an approved tool list, business-grade tenancies with data controls turned on, and a one-page policy that tells staff what can and cannot go into a prompt. That is the core of practical AI governance, and it is a Tuesday afternoon of work, not a transformation programme.
The National AI Centre’s tracker puts SME AI adoption at 43 per cent for the December to February quarter, and its research shows trust is the biggest barrier holding the rest back. So the honest picture is this: a bit under half of Australian SMEs are using AI, the committed users are expanding rather than retreating, and almost none of the laggards are being left behind yet.
That gives you room to do this properly. The answer to whether AI is worth it for your small business is not found in a Palantir manifesto or a vendor pitch. It is found by running the numbers on your own workflows. In our experience the wins are real but narrow: document drafting, meeting summaries, first-pass data analysis, service desk triage. The losses come from spraying licences across the whole team and hoping.
And keep Karp in perspective. Palantir sells the alternative to the companies he is criticising, so his outrage arrives with an invoice attached. He is right that businesses should demand ROI and keep control of their data. He is not a neutral referee, and neither is any vendor. Independent advice matters here, which is why AI spend now belongs in your IT strategy planning alongside licensing and security, not in a drawer of forgotten subscriptions.
Total your AI spend this week. Pull every AI subscription, add-on and usage bill into one list, including the ones hiding inside other software. Most owners are surprised by the number. You cannot judge ROI on spend you have not counted.
Attach a number to each tool. For each subscription, write down the task it does and the hours it saves per month. Anything that has no answer after 30 days of tracking gets cancelled or retrained. This single habit answers the worth-it question better than any think piece.
Get an independent read on your AI setup. We run AI readiness reviews for Perth businesses that cover exactly this: what you are spending, what is actually being used, where your data is going, and what governance you need. Contact us on 1300 EPIC IT and we will tell you straight, including which tools to cancel.
Yes, when it is applied to specific workflows and measured. MYOB found 82 per cent of AI-using Australian SMEs report a positive impact, but 46 per cent never measure it. AI is worth it for small business when each tool has a defined task and a tracked saving; it is not worth it as a pile of unused licences.
Alex Karp told CNBC in July 2026 that token-based AI pricing has gone wrong, describing it as a wealth tax on businesses. He argued companies pay rising AI bills without clear returns while handing over their data, and pointed to open-weight models and data ownership as the alternative.
AI sovereignty means keeping ownership and control of your data, and where practical your models, rather than surrendering them to a third-party AI provider. For a small business it starts with business-grade AI accounts, data controls switched on, and clear rules about what staff can put into a prompt.
Typical tools run from free tiers up to roughly $30 to $60 per user per month for business-grade plans, and usage-based tools can cost far more. The bigger risk is sprawl: several overlapping subscriptions plus AI add-ons inside existing software. Total the full spend before judging whether AI is worth it for your small business.
Shadow AI is staff using AI tools the business never approved or configured, often free personal accounts. It matters because company data entered into those tools leaves your control, which creates privacy, confidentiality and compliance risk. An approved tool list and a short AI use policy fix most of it.
