GoKawiilAI coding tools deliver immense value: at Databricks, agentic coding has measurably improved every velocity metric we track and, in some teams, driven an order-of-magnitude gains in output. But nearly every company deploying AI tools at scale has hit the same wall: exponentially growing costs. That curve is unsustainable - left unchecked it will eventually overtake revenue. The spend explosion has left enterprises in a paradoxical situation: on the one hand, desiring to maximally push AI transformation and put powerful tools in the hands of employees, and on the other hand, having to reconcile with an aggregate cost profile that threatens to undermine or even reverse the very efficiency gains AI provides.
Fortunately, several of the earliest large-scale adopters have converged on a set of approaches that solve this puzzle, achieving a “dual mandate”: (a) providing broad access to AI tooling, with minimal friction, and (b) keeping aggregate costs inside of a roughly fixed envelope per user. This post outlines proven cost management techniques, based on our experience at Databricks and conversations with several other digital-native companies, including Stripe, Coinbase, Uber, and Ramp. The table below summarizes current techniques and associated savings; the numbers are directional, based on an informal survey of development teams:
Some of these techniques can be easily implemented with software many companies already use. Others require new infrastructure, particularly techniques that modify end-user clients or shift traffic across models. At Databricks, we’ve open sourced or made freely available our key infrastructure components: an end user meta-harness (Omnigent) and our AI Gateway (Unity AI Gateway). For completeness, this post also covers software used by other companies we spoke with.
The “Efficiency Frontier” for Coding Models
The single greatest cost lever in moving coding spend to more efficient models as they are released. This point bears some discussion, as the simple explanation of "cheaper models” in fact hides a nuanced relationship between model cost and quality.
Colloquially, the term frontier model means “the highest intelligence model,” and frontier labs largely focus on advancing peak intelligence. Frontier models can now solve novel problems in math or cybersecurity. But when AI is deployed at scale, a different type of frontier matters more: the efficiency frontier. The efficiency frontier is defined by the set of models that have the best price point for a given level of intelligence. Most day-to-day coding doesn't require mathematical proofs or novel security insights, so what matters in aggregate is the cost of models that meet the quality bar for typical software engineering work. This "efficiency frontier” is advancing far faster than the intelligence frontier, with new models being released almost weekly that present better intelligence-per-unit-price than prior models.
Cost Lever #1: Moving to open source and lower cost models
Rapidly adopting newer, more efficient models delivers the largest cost wins of any technique. But to capture those gains, a company first needs to know which models actually beat its incumbents. This can be difficult because public benchmarks do a poor job of indicating real-world performance on coding tasks. To size up new models, many companies have built automated evaluations that they believe are more representative of their internal development mix. Databricks recently published an example of such a benchmark, in which we observed highly competitive price/performance for GLM models. That benchmark led us to roll GLM out to developers internally. Often, new models do not advance the efficiency frontier,and evaluations frequently produce negative results: Stripe found that Opus 4.7 did not meaningfully improve quality over Opus 4.6, while increasing cost. They therefore declined to make Opus 4.7 available internally. Databricks saw similar cost regressions when comparing Opus 5.0 to 4.8.
Harness and Model Flexibility
Since the biggest wins come from switching to new models, adopting end user tooling that allows for model flexibility is becoming a critical component of keeping costs down. The tool most commonly used in concern with a particular model is called harness. Proprietary frontier models are increasingly co-designed to work well with specific harnesses, meaning certain harnesses “work better” with certain models. If a company wants to preserve model independence there are roughly two approaches:
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