AI tokens getting cheaper but businesses paying more than ever
Businesses have effectively installed a new utility pipe into their operations, and are only now discovering what it costs to keep the tap running, against how little water is coming out.
Businesses are grappling with the costs of AI technology, despite recent price drops for AI tokens. Australian companies are spending $5-8 billion annually on AI, much of which goes offshore. The head of people and culture at HR software company HiBob, Anna Volkova, says it's difficult to measure the value of AI against rising costs.
Elastic's Jeremy Pell agrees, stating that businesses pay for additional AI investment but haven't yet seen cost savings. The cost of AI tokens has decreased due to competition, more efficient chips, and increased data center construction, making AI more affordable. However, the rising demand for complex AI tasks is increasing the number of tokens needed, causing companies to invest more.
AI spending is now a significant line item in annual budgets and is being closely examined by investors and boardrooms.
Written by urgent.news from ABC News AU's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
