Palo Alto Networks CEO Nikesh Arora has a message for Sam Altman CEO who said that OpenAI's GPT-5.6 Sol model is 54% more token efficient on agentic coding tasks; says: It is a good start, but over the next 12 months ...
Nikesh Arora , the CEO of Palo Alto Networks has weighed in on OpenAI’s latest announcement that its GPT-5.6 Sol model is 54% more token-efficient for agentic coding. Speaking in an interview with CNBC’s Seema Mody on Squawk on the Street, Arora said that the improvement was ‘a good start’ but warned that far deeper cost reductions are needed to make AI adoption viable at scale. Arora is of the point of view that token efficiency must drop to 20% within the next 12 months and as much as 90% by the following year. Rising token costs, he said, are straining enterprise budgets and making AI tools increasingly difficult to implement. “We need to see the pricing for AI come down,” he emphasized, noting that high costs are a major barrier to widespread adoption.
The growing executive pressure
Arora has joined the growing chorus of industry leaders calling for reform. Last week, Palantir CEO Alex Karp criticised the token model used by OpenAI and Anthropic, suggesting open-weight models could be a solution. Karp told CNBC: “Something has gone completely wrong. The basic view among enterprises is I’m going to chillax and waste my time with tokens.” This frustration has led many businesses to experiment with cheaper open‑weight tools, including models from China that are rapidly closing the performance gap with US labs.
Rising AI spending
At the same time, AI infrastructure spending continues to surge. SpaceX raised $25 billion last month in a bond sale, while Amazon raised another $25 billion in debt this week to fund AI expansion. Arora suggested that while demand for AI remains “infinite,” budgets will eventually rationalise as technology becomes more efficient.
Nikesh Arora told CEOs that layoffs is not the solution
Recently, Nikesh Arora issued a stark warning about the future of work in the AI era after telling CEOs that layoffs is not the solution. Recently, Arora said that massive job cuts are not the solution to the industry’s current talent shortage, and has advised opting for a gradual, specialised hiring strategy to build a future-proof workforce. Now speaking on the 20VC podcast (via Fortune), Arora said that 90% of employees at large companies lack AI fluency, a gap he believes could determine career survival. “I think we’re back to a Darwinian moment where everybody has to figure out who’s really good,” he explained, stressing that workers must learn independently as no formal university courses exist to prepare them.
The growing executive pressure
Arora has joined the growing chorus of industry leaders calling for reform. Last week, Palantir CEO Alex Karp criticised the token model used by OpenAI and Anthropic, suggesting open-weight models could be a solution. Karp told CNBC: “Something has gone completely wrong. The basic view among enterprises is I’m going to chillax and waste my time with tokens.” This frustration has led many businesses to experiment with cheaper open‑weight tools, including models from China that are rapidly closing the performance gap with US labs.
Rising AI spending
At the same time, AI infrastructure spending continues to surge. SpaceX raised $25 billion last month in a bond sale, while Amazon raised another $25 billion in debt this week to fund AI expansion. Arora suggested that while demand for AI remains “infinite,” budgets will eventually rationalise as technology becomes more efficient.
Nikesh Arora told CEOs that layoffs is not the solution
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