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AI can cost more than human workers now

axios.com

April 27, 2026

2 min read

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49/100

Summary

Some companies are now spending more on AI technologies than on employee salaries, leading to increased IT budgets. Bryan Catanzaro from Nvidia noted that the cost of compute exceeds employee costs, while Uber's CTO has already exceeded the full 2026 AI budget due to high token expenses.

Key Takeaways

Companies are increasingly spending more on AI than on employee salaries, leading to inflated IT budgets.
Worldwide IT spending is projected to reach $6.31 trillion in 2026, driven by growth in AI infrastructure, software, and cloud services.
Companies must demonstrate returns on AI investments to justify costs, particularly in light of shareholder expectations.
Rising AI costs may shift spending from being a strategic advantage to a potential liability for businesses.

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Community Sentiment

Mixed

Positives

AI can significantly reduce the time required for certain tasks, enabling productivity gains that are hard to ignore, especially when used appropriately.
The potential for AI to replace repetitive tasks with automation is promising, allowing engineers to focus on more complex problems.
As AI tools evolve, there is optimism that future versions will become more efficient and cost-effective, making AI a viable alternative to human labor.

Concerns

The current push for AI adoption often leads to inefficiencies, as teams may rely on AI for tasks that could be accomplished more efficiently with traditional methods.
There is skepticism about the overall productivity improvements from AI, with some arguing that it requires expert guidance to be effective.
The financial viability of AI solutions is questionable, as rising costs and token usage may not justify the initial investment compared to human labor.