As reasoning models consume more tokens and AI systems become more expensive to run, understanding what those tokens actually buy is becoming increasingly important. In this episode, @Stanford professor and Big Spin co-founder @ChrisGPotts joins us to discuss AI tokenomics and his research into “tokenflation”—the possibility that token usage is growing faster than the measurable value those tokens produce. We explore how to measure the return on AI spending, why benchmarks alone provide an incomplete picture of model progress, and what inference-time scaling means for the economics of increasingly capable models. Chris also explains why expert AI users tend to get better results by challenging and iterating with models, how AI fluency affects outcomes, and why more efficient architectures could change the underlying economics. We also discuss DSPy, interpretability, the limits of today’s transformer architectures, and where Chris sees opportunities for more fundamental innovation in AI. 🗒️ Full show notes: 📖 CHAPTERS =============================== 00:00 - Introduction 05:38 - Linguistics in the Age of Language Models 09:26 - Scale Limitations in NLP Research 12:54 - Challenging the Bitter Lesson Mindset 15:12 - Relationship Between Data, Mechanistic Interpretability, and Efficiency 17:03 - DSPy 21:32 - Prompt Optimization and Model Variability 24:35 - Tokenomics and the Rising Cost of AI 28:13 - Measuring Token Purchasing Power with a CPI 32:18 - Inference-Time Scaling 35:36 - Defining Value Across Different AI Tasks 38:33 - AI Value Creation 40:38 - Predicting AI Costs 42:25 - Tokenflation 46:22 - AI Fluency 50:12 - Key Lessons of AI Fluency Work 54:44 - Future Directions