When a token increase does matter

Silicon Valley has learned to dress up the cost of doing business in the language of generosity.

Author

Malcolm Frank, CEO
March 23, 2026

When a token increase does matter

In a new trend, the most coveted sign-on incentive in Silicon Valley isn't a grant of restricted stock units or a gourmet cafeteria. It is electricity, rebranded as "tokens" and slipped into compensation packages as if inference cycles were legal tender.

The number that should have stopped everyone cold was $250,000. That's what Jensen Huang suggested, rather casually, that top engineers ought to receive each year in AI compute. Not cash. Not equity. Compute.

Tomasz Tunguz, a VC who tracks these things more carefully than most, has done the math: one in every five dollars flowing to an engineer in Silicon Valley now goes not to the talent, but to the AI platform they're using. The model, of course, doesn't negotiate. It doesn't vest. It doesn't quit for a better offer. Which may be precisely the point.

What the industry has begun calling "token burn" (the rate at which an engineer's AI agents chew through computational resources) has quietly become the new performance metric. The more you consume, the more productive you're presumed to be.

But strip away the jargon and what you're left with is a company calling its own operating costs a benefit. No one hands a truck driver the keys to an eighteen-wheeler and calls the diesel budget a raise. The truck is how the work gets done. So are the tokens. The difference is that Silicon Valley has learned to dress up the cost of doing business in the language of generosity.

This is a masterful sleight of hand: convincing the workforce to celebrate the rising cost of their own overhead while the true equity remains firmly in the hands of the founders. And yet, for now, no one seems inclined to call the bluff. In the war for AI talent, the token budget has become the new signing bonus…but for how long?

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