3 in 3: Capex, the Token Tax, and Trusting AI Agents

Corporate spending plans are surging. Microsoft just offered voluntary exit packages to more than a quarter of its workforce. And consumers aren't quite ready to let AI take control of their bank accounts.

I'm Jim Lydotes, and these are our three points in three minutes. So let's flip over the timer and let's go. 

One thing we've talked about before here is capital spending. Companies have discretion around that. And when they feel good, they spend. And when they don't, they pull back. 

Since the end of the second quarter, capex estimates for next year, for 2027, have continued to move higher. Tech and comm services are leading. You’d expect that with all the AI spending. But what’s interesting to me is the breadth. 

In both large cap and small cap, 10 out of 11 sectors have seen estimates move higher. That’s about as strong of a confidence signal as you’re going to get from corporate America. 

Second, imagine your company told you and a bunch of your colleagues that it would pay you to leave. That's just what Microsoft just did. It told 60,000 employees they were eligible for a voluntary exit program, which is more than a quarter of its entire workforce. So obviously, all 60,000 people are not going to take this package. But the more interesting question is what this tells us about where the workplace is headed. 

Historically, when you hired another employee, the incremental costs were pretty straightforward. It was salary, it was healthcare, benefits, maybe some office space. Now, companies have to consider the compute cost that's going to be attached to that additional worker. Giving employees Copilot, Claude, or any AI coding tool, and increasingly they're going to come with the token budget. And that can make every worker more productive for sure, but it also changes the economics of adding that next employee by making them a lot more expensive. 

So that's the bigger point. AI may not simply replace labor, it may change the mix with companies spending a lot more on technology and compute while needing fewer incremental people to grow. So as companies consider the total cost of an employee with a token tax added on, as we head into next year, that will probably make them want to add fewer people. 

And finally, our Grassroots team surveyed more than 500 Americans who use AI at least weekly, and the results were fascinating. Nearly 60% already use AI every day, but there's a difference between using it and trusting it. 

On the one hand, you have almost 70% who are primarily asking questions, researching topics or generating content. But when it comes to our money, we're even more cautious. Nearly three-quarters of those respondents either won't let an agent make purchases without approval or would limit that purchase to no more than $100. 

To me, that's the next frontier of AI adoption. We've largely crossed the familiarity hurdle. Now it's a battle for trust. And whoever wins that battle may ultimately own the consumer relationship. Because for agents to really be useful, eventually we have to give them agency. The next leg up in the AI trade is going to be all about agent adoption. So we need to monitor this trust factor very closely. Because if it doesn't start to improve, we may have to question some of our most aggressive AI adoption estimates. 

That's our three points in three minutes with a little sand left in the bottle. Have a wonderful week and we'll see you back here next time.

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