IT budgets are getting blown out as some companies increasingly spend more on AI than on employees' salaries.
Why it matters: Maybe human labor will be more cost efficient after all.
What they're saying: "For my team, the cost of compute is far beyond the costs of the employees," Bryan Catanzaro, vice president of applied deep learning at Nvidia, told Axios.
Uber's chief technology officer already blew through his full 2026 AI budget due to token costs, according to The Information.
Amos Bar-Joseph, CEO of Swan AI, bragged about his Anthropic bill in a viral LinkedIn post, saying "We're building the first autonomous business - scaling with intelligence, not headcount."
Zoom out: Worldwide IT spending is expected to reach $6.31 trillion in 2026, up 13.5% from 2025, according to Gartner.
That increase is being driven by "sustained momentum" across AI infrastructure, software and cloud services, which includes everything from the AI buildout to the cost of AI subscriptions.
Yes, but: Even companies with the biggest IT budgets will need to prove returns on AI spending over time, especially if they're answering to shareholders on quarterly earnings calls.
That could look like proof of productivity gains or metrics that show a clear return for all this AI investment.
"The tone is shifting a bit more into what is the true value of a worker... human or digital?" said Brad Owens, vice president of digital labor strategy at Asymbl, which focuses on workforce orchestration.
What we're watching: How rising costs impact enterprise spending at the major AI labs.
An OpenAI investor told Axios that the shift could benefit them, since they view Codex as superior to Claude Code at maximizing tokens efficiently, cutting down on usage costs.
Anthropic has changed its pricing to account for a spike in demand.
The bottom line: When AI labs raise prices, big spending on AI could shift from a flex to a liability.
Amos Bar-Joseph, CEO of Swan AI, bragged about his Anthropic bill in a viral LinkedIn post, saying "We're building the first autonomous business - scaling with intelligence, not headcount."
Given how unintelligent this sentence is, maybe using LLM is indeed the more intelligent choice for them after all...
And that's with the current subsidized prices of AI, all those companies are bleeding money. When they start charging the necessary value to profit it will be extremely expensive to companies
The problem is that at that point all of the ceos and middle managers will have drunk the coolaid and won't be able to hire people fast enough to make up the difference.
An oil rig fire is also less fuel efficient than a car for moving people.
I guess the cost of AI vs an employee depends on whether you want actual work to be done, or if you just want to spend money on making it look like something is happening.
19 Comments
Widdershins@lemmy.world · 60 pts · 138d
Fuck links here's the article:
IT budgets are getting blown out as some companies increasingly spend more on AI than on employees' salaries. Why it matters: Maybe human labor will be more cost efficient after all. What they're saying: "For my team, the cost of compute is far beyond the costs of the employees," Bryan Catanzaro, vice president of applied deep learning at Nvidia, told Axios. Uber's chief technology officer already blew through his full 2026 AI budget due to token costs, according to The Information. Amos Bar-Joseph, CEO of Swan AI, bragged about his Anthropic bill in a viral LinkedIn post, saying "We're building the first autonomous business - scaling with intelligence, not headcount." Zoom out: Worldwide IT spending is expected to reach $6.31 trillion in 2026, up 13.5% from 2025, according to Gartner. That increase is being driven by "sustained momentum" across AI infrastructure, software and cloud services, which includes everything from the AI buildout to the cost of AI subscriptions. Yes, but: Even companies with the biggest IT budgets will need to prove returns on AI spending over time, especially if they're answering to shareholders on quarterly earnings calls. That could look like proof of productivity gains or metrics that show a clear return for all this AI investment. "The tone is shifting a bit more into what is the true value of a worker... human or digital?" said Brad Owens, vice president of digital labor strategy at Asymbl, which focuses on workforce orchestration. What we're watching: How rising costs impact enterprise spending at the major AI labs. An OpenAI investor told Axios that the shift could benefit them, since they view Codex as superior to Claude Code at maximizing tokens efficiently, cutting down on usage costs. Anthropic has changed its pricing to account for a spike in demand. The bottom line: When AI labs raise prices, big spending on AI could shift from a flex to a liability.
spectrums_coherence@piefed.social · 11 pts · 137d
Given how unintelligent this sentence is, maybe using LLM is indeed the more intelligent choice for them after all...
massacre@lemmy.world · 3 pts · 137d
Yeah, that is exactly 1 metric fuckton of dude-bro speak
criticon@lemmy.ca · 44 pts · 138d
And that's with the current subsidized prices of AI, all those companies are bleeding money. When they start charging the necessary value to profit it will be extremely expensive to companies
4am@lemmy.zip · 12 pts · 137d
They’re doing enshittification to enterprises now. Ballsy move, TBH
NOPper@lemmy.dbzer0.com · 6 pts · 137d
Cisco led the way years and years ago.
leoj@piefed.social · 6 pts · 137d
🪀🗡️
CosmicTurtle0@lemmy.dbzer0.com · 3 pts · 137d
The problem is that at that point all of the ceos and middle managers will have drunk the coolaid and won't be able to hire people fast enough to make up the difference.
pinball_wizard@lemmy.zip · 5 pts · 137d
Yes. Lol.
But you say problem, I say bidding war for my skills by the same assholes who told me I was obsolete... Again.
corsicanguppy@lemmy.ca · 3 pts · 137d
subsidized, right?
criticon@lemmy.ca · 3 pts · 137d
Yep
Argyle13@lemmy.world · 19 pts · 138d
Linked without paywall
Serinus@lemmy.world · 2 pts · 137d
The archive sites have been known to change content.
Argyle13@lemmy.world · 5 pts · 137d
Ok, then try to open it from the axios source with a different method. It is complicated
18107@aussie.zone · 11 pts · 137d
An oil rig fire is also less fuel efficient than a car for moving people.
I guess the cost of AI vs an employee depends on whether you want actual work to be done, or if you just want to spend money on making it look like something is happening.
Jaysyn@lemmy.world · 9 pts · 137d
Just like Ed Zitron predicted.
"Dogshit unit economics."
Banana@sh.itjust.works · 2 pts · 137d
Good.
RodgeGrabTheCat@sh.itjust.works · 2 pts · 138d
Excellent news.
LodeMike@lemmy.today · 1 pts · 137d
Can't view as it has a recapatcha in front of it.