AI costs are hitting corporate America
Corporate leaders are starting to question whether soaring AI spending is delivering meaningful returns.
Why it matters: Companies that rushed to embrace AI are now confronting ballooning IT costs, uncertain productivity gains and growing employee skepticism.
Driving the news: Microsoft canceled most of its Claude Code licenses, in part over costs, according to The Verge, and Uber’s COO said AI costs are getting “harder to justify.”
- An AI consultant tells Axios one of their clients recently spent half a billion dollars in a single month after failing to put usage limits on Claude licenses for employees.
- Companies are citing AI’s ability to automate jobs as a cause for layoffs, though Anuj Kapur, CEO of CloudBees, told Axios that workforce cuts may simply be “the only lever they can pull” to offset their AI bills.
- Consumer sentiment around AI is also nosediving, and employees are rebelling against the use of the technology at work.