Cheaper AI isn’t the panacea

FOR a technology that promises to help businesses cut costs, artificial intelligence (AI) has had a big problem with being so costly.

AI’s scaling laws, which say that you need more computing power to make more powerful models, have put tech companies on a race to spend billions of dollars building vast data centres and buying powerful chips – costs they can’t help passing on to their customers. Google’s AI tool for generating documents or e-mails for office workers is not cheap. It adds US$20 to their employer’s monthly US$6 bill for the company’s Workspace suite, per staff member. Microsoft Corp’s Copilot AI assistant costs US$30 a month per worker.

Meanwhile, the cost of deploying AI directly into a company’s systems can cost between US$5 million and US$20 million, according to research firm Gartner, which estimates that 30 per cent of generative AI projects will be abandoned by the end of 2025 in part because of all that expense.