McKinsey: Cheaper AI models, bigger AI bills
Good morning. Intelligence is getting radically cheaper, but enterprise AI bills keep climbing anyway.
TL;DR
- The cost per unit of AI capability is decreasing, but overall enterprise AI spending is rising.
- AI consumption is exploding, particularly with autonomous agents performing more complex tasks.
- The cost of agentic AI tasks can be highly variable due to different execution paths.
- AI cost management should focus on engineering efficient systems and evaluating agents at the task level.
- Companies can manage AI spending through visibility, workflow optimization, and sourcing discipline.
- The goal of AI cost management should be optimizing for the highest returns, not indiscriminate cost-cutting.