IT budgets are getting blown out as some companies increasingly spend more on AI than on employees' salaries.
Why it matters: Maybe human labor will be more cost-efficient after all.
What they're saying: "For my team, the cost of compute is far beyond the costs of the employees," Bryan Catanzaro, vice president of applied deep learning at Nvidia, told Axios.
- Uber's chief technology officer already blew through his full 2026 AI budget due to token costs, according to The Information.
- Amos Bar-Joseph, CEO of Swan AI, bragged about his Anthropic bill in a viral LinkedIn post, saying "We're building the first autonomous business - scaling with intelligence, not headcount."
Zoom out: Worldwide IT spending is expected to reach $6.31 trillion in 2026, up 13.5% from 2025, according to Gartner.
- That increase is being driven by "sustained momentum" across AI infrastructure, software and cloud services, which includes everything from the AI buildout to the cost of AI subscriptions.
Yes, but: Even companies with the biggest IT budgets will need to prove returns on AI spending over time, especially if they're answering to shareholders on quarterly earnings calls.
- That could look like proof of productivity gains or metrics that show a clear return for all this AI investment.
- "The tone is shifting a bit more into what is the true value of a worker ... human or digital?" said Brad Owens, vice president of digital labor strategy at Asymbl, which focuses on workforce orchestration.
What we're watching: How rising costs impact enterprise spending at the major AI labs.
- An OpenAI investor told Axios that the shift could benefit them, since they view Codex as superior to Claude Code at maximizing tokens efficiently, cutting down on usage costs.
- Anthropic has changed its pricing to account for a spike in demand.
The bottom line: When AI labs raise prices, big spending on AI could shift from a flex to a liability.