Software Engineering Daily · Tuesday, October 27, 2026
Patrick Wendell shares that Databricks encountered explosive, near-exponential cost growth for internal AI coding tools after shifting to consumption pricing and deploying more capable foundation models. To combat runaway spending, the engineering team had to implement practical cost-management measures.
“Suddenly, the problem wasn't getting people to use them. The problem was that people were using them a lot. And around the same time, all of the foundation model apps switched to consumption pricing.”
“And we have thousands of developers. So this can start to accumulate really fast. And I would say, oh, I don't know, maybe beginning of 2026 around that time or late 2025 is when we realized, oh, [00:07:01] And again, we wanted to have an attitude of people use tools, we want you to use tools and be productive. But they're just some law of physics where when costs start to accumulate at a certain rate, it's going to eventually any company that doesn't address it, it will eventually bankrupt that company”