AI costs are rising for organizations, reports warn
Two new reports from consulting giants show how the AI adoption conversation has shifted from whether it works to whether the spending on it is sustainable. The AI bill is coming for governments and businesses, and no one knows whether the money will be there to pay it. Two new reports from consulting giants show how the AI adoption conversation has shifted from whether it works to whether the spending on it is sustainable, as pilot programs pile up and agentic applications take off. The debate over AI safety in recent weeks has somewhat dwarfed the still very urgent discourse over AI’s macroeconomic impacts. Those stakes were made clear in a Bain & Company report this week that found that the industry’s compute demand will require $6 trillion in annual revenue by 2031 — including about $4.2 trillion from new markets and products that don’t exist yet. At the same time, buyers of AI are coming under pressure. A McKinsey report focusing on American government entities — a large and fast-growing customer for enterprise AI — warned that the per-token price of AI is collapsing, but the total bill is rising, as agents require much more compute. For many governments, until now, “usage mig
Two new reports from consulting giants show how the AI adoption conversation has shifted from whether it works to whether the spending on it is sustainable. The AI bill is coming for governments and businesses, and no one knows whether the money will be there to pay it. Two new reports from consulting giants show how the AI adoption conversation has shifted from whether it works to whether the spending on it is sustainable, as pilot programs pile up and agentic applications take off. The debate over AI safety in recent weeks has somewhat dwarfed the still very urgent discourse over AI’s macroeconomic impacts.
2 trillion from new markets and products that don’t exist yet. At the same time, buyers of AI are coming under pressure. A McKinsey report focusing on American government entities — a large and fast-growing customer for enterprise AI — warned that the per-token price of AI is collapsing, but the total bill is rising, as agents require much more compute. For many governments, until now, “usage might have been essentially near-zero cost,” McKinsey Senior Partner and Global Public Sector Leader Tim Ward told me.
” The coming IPOs from Anthropic and OpenAI will surely bring more debate over whether their revenue can catch up to the labs’ lofty valuations. But “ the complete disruption of the economy is all but certain, ” credit rating agency Egan-Jones wrote Wednesday, in a note titled It’s Over.