To:        Business Officers and Principal Investigators,

From:   Debby Zumbach, Associate Vice President, Business Services

              Rachel McGuire, Assistant Vice President, University Controller

Date:   July 1, 2025

Re:        Guidance on Token Purchases or Subscriptions for Large Language Models

We are writing to provide important guidance on the purchase of tokens or subscriptions for large language models such as Copilot, ChatGPT, OpenAI, and Gemini.

As you consider acquiring the services of these tools, we highly recommend utilizing the "Pay as you go" model for payment for all funding types. This approach ensures that costs are incurred as usage occurs, providing greater flexibility and avoiding the pitfalls associated with prepayments.

While subscription or bulk purchase methods may offer some cost savings, it is important to note that these approaches are considered prepayments. Consequently, they are not allowed on grant funds 500 and 510. It is crucial to adhere to these guidelines to ensure compliance with funding rules and regulations.

Key Points:

• Recommended Payment Model: "Pay as you go"
• Not Allowed: Subscription or bulk purchase of tokens on Grant Funds 500 and 510
• Prepayments on other funds should be for a reasonable amount.

We appreciate your cooperation in following these recommendations and ensuring adherence to grant fund policies. Should you have any questions or require further clarification, please do not hesitate to reach out to us.

Thank you for your attention to this matter.

Last updated: 07/10/2025