GoKawiilArtificial intelligence is turning out to be far more expensive than anyone expected, and CFOs at major U.S. companies are now facing a brutal new trade-off: tokens or humans.
That was the picture two enterprise AI CEOs at the center of the buildout described to CNBC this week. Their accounts of what's happening inside the Fortune 500 paint a sharp picture of the threat that rising costs pose to the AI trade. It's a risk the market hasn't yet recognized as it hits record highs and mints new trillion-dollar companies like Micron .
The number one topic for every enterprise right now is overblown AI budgets, Arvind Jain, CEO of enterprise AI company Glean, told CNBC.
"Companies are telling us that their AI budgets are getting exhausted in one month or two months, and these are annual budgets," he said.
That's because the cost of AI hasn't come down the way buyers expected. Rather, it's gone up. Each new model release from the frontier labs is roughly twice as expensive per token as the one it replaced, putting enterprise AI on what Jain called "an unsustainable path right now."
"This is the first time ever that I can remember that technology costs the same as people, and you're making that comparison: choose tech or people," he said. "We've never had that conversation historically, because tech is a fraction of the overall cost of any operating business."
That growing AI budget, he says, is increasingly coming in lieu of future headcount growth.