In the age of AI, employee cost should be a dynamic number based on their model usage choices rather than a static salary, creating a new quadrant for evaluating employee cost-effectiveness.
Alex Atallah proposes that companies should track employee cost as a dynamic metric reflecting their AI model choices, and evaluate workers on a quadrant of productivity versus cost-effectiveness—something he believes is under-discussed in the AI transformation. ✦ AI generated
Alex Atallah · 20VC · 2026-08-10 · original ↗
starts at this moment · 103:54
“What's the craziest thing that you see in your seat on top of everyone's usage that you don't think people talk about enough?”
Really, your your employees all cost totally dynamic different amounts now and uh I think a lot of like companies are putting it on them to do routing. And I think in the future there's a good chance that it will like get pushed downwards to the employee level. Your employees should like figure out which tools and models to use that are best for their tasks and then we should figure out how much you're costing be like due to the choices that you make as an employee ... your your cost as an employee is a going to be a dynamic number and it's going to be, you know, dependent on how much that employee is like effectively using, you know, expensive and cheap models to do their job.
verbatim transcript · starts at 103:54
(01:03:54) worried about cost management and uh and freaking out about the amount of inference they're spending and they don't know how to think about it. It's like a whole new way of of like doing business and thinking about your your opex. Like the old way of thinking about how your how much you give your employees, you like give them a salary and you kind of forget about it.
(01:04:16) Like someone knows what what everyone's making but like it's a static number that like it's readjusted on on a quarterly basis maybe after performance reviews. Really, your your employees all cost totally dynamic different amounts now and uh I think a lot of like companies are putting it on them to do routing. And I think in the future there's a good chance that it will like get pushed
(01:04:43) downwards to the employee level. Your employees should like figure out which tools and models to use that are best for their tasks and then we should figure out how much you're costing be like due to the choices that you make as an employee [snorts] and you know, your your cost as an employee is a going to be a dynamic number and it's going to be, you know, dependent on
(01:05:05) how much that employee is like effectively using, you know, expensive and cheap models to do their job. And uh and then I would I I advise companies to kind of like still do their normal management work, like have their managers kind of assess how how effective and productive employees are, but also line it up with how much their employees cost, and then kind of come up with, you know, a quadrant of