Brace for Impact: AI Costs Set to Surge Software Budgets

Software costs are set to rise as vendors like Microsoft, OpenAI, and Anthropic shift to usage-based billing to cover escalating AI expenses, according to Forrester research. The report warns that 80% of decision-makers expect data and software spending to increase, with IT staffing costs already consuming 35% of budgets. Businesses must adapt FinOps strategies to manage unpredictable AI-driven pricing.

Brace for Impact: AI Costs Set to Surge Software Budgets As major players like Microsoft and OpenAI shift to usage-based billing, businesses must prepare for rising software costs driven by AI. Software costs are about to climb, and businesses should brace for impact. Forrester's latest research reveals that software vendors, driven by escalating AI expenses, plan to pass these costs onto customers through increased prices and usage charges. The survey, based on feedback from over 2,600 business and tech decision-makers, indicates that software budgets are set to rise. Shifting Pricing Models In recent months, notable companies like Anthropic /glossary/anthropic , OpenAI /glossary/openai , and GitHub have pivoted from flat-rate subscriptions to usage-based billing. This shift has sparked concerns among users about escalating costs. Forrester also highlights Microsoft's introduction of the premium E7 license, which includes M365 Copilot /compare/github-copilot-vs-cursor , Agent 365, and security tools. The benchmark /glossary/benchmark results speak for themselves, signaling a change in how companies are adapting to the growing financial demands of AI. AI's Expanding Financial Footprint Bain & Company previously estimated that AI datacenter build costs could reach $2 trillion by 2030. Forrester's report suggests that AI's financial footprint is only expanding. A significant 80% of decision-makers expect data and software spending to increase. Sharyn Leaver, Forrester's chief research officer, underscores the importance of foundational investments in trusted data and organizational readiness over sheer AI expenditure. Staffing and Financial Restructuring Western coverage has largely overlooked the persistent rise in staffing costs despite recent layoffs in the tech sector. Forrester reports that IT staffing expenses account for 35% of budgets as of 2025. Interestingly, 67% of tech decision-makers plan to boost staffing budgets by 2027, with a focus on data and analytics roles. So, is AI really replacing jobs, or is this 'AI washing' masking deeper financial restructuring? Managing AI Costs Forrester advises organizations to adapt their FinOps strategies to handle unpredictable AI costs. Traditional FinOps models weren't designed for usage-driven pricing, but they must evolve to include runtime cost controls like model routing and usage guardrails /glossary/guardrails . This adaptation is essential as companies seek to manage their AI spending effectively. In July, KPMG highlighted that nearly a third of corporate leaders struggled with cost management for scaled AI implementations. Given these trends, businesses need to ask themselves: Are they prepared for the financial implications of AI, or will they be caught off-guard by rising software costs? Get AI news in your inbox Daily digest of what matters in AI. Key Terms Explained Anthropic /glossary/anthropic An AI safety company founded in 2021 by former OpenAI researchers, including Dario and Daniela Amodei. Benchmark /glossary/benchmark A standardized test used to measure and compare AI model performance. Guardrails /glossary/guardrails Safety measures built into AI systems to prevent harmful, inappropriate, or off-topic outputs. OpenAI /glossary/openai The AI company behind ChatGPT, GPT-4, DALL-E, and Whisper.