Lapis Labs Experiences Exponential Growth, OpenAI API Costs Soar

San Francisco, CA – Lapis Labs, a startup founded by Varunram Ganesh and part of the Y Combinator Winter 2025 cohort, has reported an astonishing rate of growth, evidenced by a dramatic increase in its OpenAI API expenditures. The company spent half of its total previous month's OpenAI API credits within the first four days of the current month, signaling rapid scaling of its operations.

Varunram Ganesh, the founder of Lapis Labs, shared the development on social media, stating, "> Scaling so fast we spent half of what we spent the whole of last month on OpenAI API credits in the first 4 days this month. Crazy times." This tweet highlights both the company's accelerated progress and the significant financial implications of its reliance on advanced AI models. Lapis Labs, a "Stealth" startup, is currently building a new venture under the YC F25 program, indicating its early-stage but high-potential status.

OpenAI's API pricing structure, which varies by model and usage, charges for both input and output tokens, as well as for fine-tuning and embeddings. For instance, the GPT-4 Turbo model costs $10.00 per 1M input tokens and $30.00 per 1M output tokens, while GPT-3.5 Turbo is significantly cheaper at $0.50 per 1M input and $1.50 per 1M output tokens. Such a rapid increase in API spending suggests a substantial surge in the processing of data or generation of content, likely driven by growing user engagement or expanded service offerings.

This surge in AI infrastructure costs is a common challenge for rapidly scaling AI-native startups. As these companies grow, managing the escalating expenses associated with large language model APIs becomes critical for maintaining profitability and securing future funding. The "crazy times" described by Ganesh reflect the balancing act between aggressive growth and cost management that many AI startups face in today's competitive landscape.

Lapis Labs' trajectory underscores the intense demand for AI-powered solutions and the operational complexities involved in delivering them at scale. The company's ability to sustain this growth while optimizing its API usage will be a key factor in its long-term success.