AI Was Supposed to Save Companies Money. Instead, It’s Blowing Up Budgets in a Big Way

The refrain from executives amid the seemingly-continuous job cuts over the past few months has been a common one: AI can do the job at a lower cost than human workers. But a new report has issued a stark warning: That school of thought is wrong. Very wrong. A survey from KPMG finds business owners are aghast at their bills for AI, now that many AI companies have shifted to a usage-based model. The accounting firm spoke with 2,145 executives around the world, and one-third said they had a limited understanding of usage costs. AI companies used to charge corporate clients a flat rate, but as compute costs have increased, many major operators are switching to a different model to help control costs. That wasn’t factored into some executives’ decisions to go all-in on the technology. “AI is now as much a financial management priority as it is a technology one,” Rob Fisher, global head of advisory at KPMG, said in a statement. “The real risk isn’t investing in AI but doing so without cost visibility and an understanding of the economics of AI. Organizations that have visibility into their costs and maintain strong oversight are the ones translating AI investment into real, measurable value.” Making matters worse, the higher pricing model comes as many businesses are still figuring out how to use AI efficiently. Many did not realize, for instance, the need to build the capabilities required to forecast, monitor, and manage AI spending, the report says. There have been several examples of this in the past year. Uber blew through its entire 2026 AI budget in just four months. (The company has since set usage caps on various AI-powered tools used by its staff.) Another company, which remains unnamed, spent $500 million on AI in just one month, since its employees apparently had no limit on how many licenses they could use. AI companies acknowledge the rising prices but aren’t signaling things will change anytime soon. Last month, OpenAI CEO Sam Altman said in an interview: “People are really saying, ‘My company spent my entire 2026 budget in Q1. Can you make this more efficient?’” And since the start of the year, Altman continued, it went from being “an issue that never came up (people were totally happy with the amount they were spending) to, all of a sudden, a huge issue.” Part of the reason for that new urgency is the escalating cost of new models as AI companies battle for supremacy. Each new top-level release is “roughly twice as expensive per token as the one it replaced,” Arvind Jain, CEO of AI company Glean, told CNBC. Prioritizing people While there has been no slowdown in tech layoffs so far (though Gartner says half of those will be reversed by 2027), a growing number of executives say they’re focusing more on human-AI collaboration, utilizing the advantages of both, and choosing to upskill their remaining workforce. “By putting AI directly into the hands of their people, organizations are better positioned to translate adoption into real business value,” KPMG’s report says. Value is key, as just 7 percent of the executives surveyed said they were seeing a return on investment in AI. Nearly one-quarter of those executives, however, said they were facing pressure to prove the technology’s value to investors. Step one of that is getting a better handle on spending. Some 23 percent said they struggle with usage-based costs, and 42 percent said they only have partial visibility into AI spending. That’s making tools like monitoring dashboards, which track the cost of each employee’s AI usage, more common. And roughly half of the executives say cost reviews have become part of the AI approval process. Companies that take those steps, says KPMG, are five times more likely to report an established ROI. “We’re seeing a clear divide between organizations with leadership accountability at the top and those without,” said Steve Chase, KPMG’s global head of AI and digital innovation. BY CHRIS MORRIS @MORRISATLARGE