Sticker shock has execs rethinking this whole AI thing

The Register · 3 days ago

Enterprise executives are experiencing unexpected cost increases from AI services that switched to usage-based token billing, with a KPMG survey finding 29 percent of senior executives struggling to understand scaling costs and nearly half reconsidering deployments. Gartner research projects that AI coding agent costs per developer will exceed average global developer salaries by 2028, and already exceed salaries in lower-cost regions like India. Companies are responding by deploying cheaper models, using open source alternatives, and adopting tools like a Netflix engineer's token-trimming utility that has saved users hundreds of thousands of dollars by removing redundant input before sending to language models.