Is AI More Expensive Than Employees? Rising AI Costs Put Pressure On Company Budgets

IT companies are increasingly spending more on artificial intelligence than on their workforce, raising a key question: is AI still more cost-effective than human labour? According to Axios, rising investment in AI tools, infrastructure and computing power is putting pressure on IT budgets.

Recent trends show that businesses are allocating large sums to AI, with some already spending more on running AI systems than on employee salaries. Bryan Catanzaro, vice president of applied deep learning at Nvidia, highlighted this shift. “For my team, the cost of compute is far beyond the costs of the employees,” he told Axios.

The surge in spending is being seen across companies. The chief technology officer of Uber has reportedly exhausted the firm’s entire

AI budget for 2026 due to high token costs, as per Axios. Meanwhile, Amos Bar-Joseph, CEO of Swan AI, shared details of his rising bill from Anthropic, saying, “We’re building the first autonomous business – scaling with intelligence, not headcount.”

AI Spending Driving Global IT Growth

Global IT spending is expected to reach $6.31 trillion in 2026, a 13.5 per cent rise from 2025, according to Gartner. The increase is largely driven by sustained investment in AI infrastructure, software and cloud services, Axios reported.

ALSO READ: Meta To Cut 8,000 Jobs In May As AI Spending Ramps Up

Pressure To Prove Returns

Experts say companies will soon need to justify these growing expenses. Firms, especially those accountable to shareholders, may have to demonstrate clear returns on their AI investments.

This could include improved productivity or measurable outcomes that validate the spending. Brad Owens, vice president of digital labour strategy at Asymbl, told Axios, “The tone is shifting a bit more into what is the true value of a worker… human or digital?”

Costs May Reshape AI Adoption

Rising costs could also influence how companies deploy AI tools. Pricing changes by major AI firms are already under close watch. An investor in OpenAI told Axios that more efficient tools such as Codex could help reduce usage costs compared to alternatives.

At the same time, Anthropic has revised its pricing structure to reflect increased demand.

The Bigger Picture

While AI continues to attract strong investment, its long-term value remains under scrutiny. If costs continue to rise, companies may reconsider how heavily they depend on AI.

For now, what was once seen as a competitive advantage could turn into a financial strain if returns fail to match the level of spending.