After Rippling blew millions on AI in months, it built an employee ROI tool

Rippling, an HR software provider, recently introduced a product called AI Spend Console, designed to help companies track and control their AI spending. The tool maps individual employee, team, and role AI spending, assessing whether employees are truly more productive or simply generating more AI content. The motivation behind this innovation stemmed from Rippling's overindulgence in AI usage at the beginning of the year, leading to an alarming 40% of its R&D budget being spent on AI tokens.

The company's Chief Product Officer, Matt MacInnis, recalls a March meeting where CFO Adam Swiecicki revealed the shocking figures, prompting an urgent project to understand and manage the spending. Rippling discovered that a mere 10-15% of employees were causing about 60% of the total AI spend. One engineer, in particular, was spending $50,000 a month on AI usage.

Rather than eliminating AI usage, Rippling opted for a more controlled approach, negotiating maximum spending caps with the tools they used. The company quickly realized that employees were defaulting to the most expensive, advanced models for every task, and this led to a significant change in their AI strategy. Enterprises have since discovered that using multiple models from various AI labs at different price points is essential, including cheaper open-weight models from non-mainstream labs like SpaceX's Grok and Databricks' GLM 5.2.

Rippling built its own AI gateway to route prompts to the most cost-effective models for specific tasks. The AI Spend Console produces dashboards displaying attributes such as prompts per day, work output, and spending, allowing Rippling to drop its token spend from 40% of its headcount budget to about 15%. While the tool successfully rein in spending, the company acknowledges that measuring productivity in non-engineering functions remains a work in progress.