{
  "id": 9341435,
  "title": "AI spending can run negative. Qodo’s CEO built an ROI equation to fix it.",
  "url": "https://urgent.news/2026/09/23/ai-spending-can-run-negative-qodos-ceo-built-an-roi-equation-to-fix-it",
  "topic": "ai",
  "section": "AI",
  "published": "2026-09-23T13:00:00.000Z",
  "source": {
    "name": "The New Stack",
    "slug": "the-new-stack",
    "url": "https://thenewstack.io/qodo-ai-roi-equation/"
  },
  "original_language": "en",
  "account": "Qodo, a startup that employs AI to ensure AI-generated code meets customer quality and governance requirements, has set a limit on its AI consumption to avoid runaway costs. CEO Itamar Friedman explained that his engineers are granted $10,000 worth of tokens per month, described as \"generous,\" but most developers never reach the cap. The cap was put in place to drive visibility and efficiency, allowing the company to scale without runaway costs. However, Qodo's AI footprint exceeds its developer token budget, with AI infrastructure spend growing at roughly 5x year over year due to increased user adoption and longer tasks being taken on. The company is simultaneously pushing down the cost of reviewed pull requests through routing and inference efficiency. Qodo dogfoods heavily, running its pull requests through its product, which powers its entire software development life cycle (SDLC). This approach has resulted in more pull requests and fewer bugs and incidents, indicating that Qodo's focus on software testing and governance is effective. The bottleneck has shifted, with more PRs and fewer bugs. Friedman tracks employee preferences for AI coding tools and compares them to usage data, finding that staff are \"shifting quickly towards Codex.\" The AI ROI Equation proposed by Friedman compares AI benefits against AI costs, similar to an equation for happiness. The equation, AI benefits/AI costs = AI ROI, aims to measure the overall return on investment in AI. Qodo's approach to measuring total AI ROI is less specific than The Phoenix Project's DevOps equation but is still valuable. Friedman suggests that startups should limit the number of terms in their AI ROI equation to no more than six or eight for an afternoon's work, initiating an ongoing exercise to track and improve AI ROI.",
  "summary": "Flush with the proceeds of a $70 million Series B raised earlier this year, you might expect Qodo to spend The post AI spending can run negative. Qodo’s CEO built an ROI equation to fix it. appeared first on The New Stack .",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}