Some companies are now spending more on AI than on employee salaries, according to Axios, as IT budgets surge to accommodate the technology's operational costs. Nvidia vice president Bryan Catanzaro told Axios: "For my team, the cost of compute is far beyond the costs of the employees." Uber's chief technology officer has already exhausted his full 2026 AI budget due to token costs, as reported by The Information.
This trend marks a reversal of the narrative that AI would inevitably reduce labor costs. Firms like Swan AI are openly touting large AI bills—CEO Amos Bar-Joseph posted on LinkedIn about his Anthropic invoice, stating his goal is "building the first autonomous business." The shift suggests that AI adoption may come with hidden expenses that challenge initial cost-saving projections.
Global IT spending is forecast to reach $6.31 trillion in 2026, a 13.5% increase year-over-year, according to Gartner. The research firm attributes the growth to "sustained momentum" in AI infrastructure, software, and cloud services—from the AI buildout to subscription costs. These numbers underscore how deeply AI costs are embedding into corporate budgets.
But the spending spree faces scrutiny. Companies with large IT budgets will need to demonstrate returns on AI investments over time, especially when reporting to shareholders on quarterly earnings calls. The pressure to justify AI expenditures may force some firms to reassess their strategies.
Whether this dynamic signals a long-term shift or a growing pain remains unclear. For now, the cost of intelligence is rising—and human labor may look more economical by comparison.