AI is currently costing big tech companies more than human workers, even as they pour record spending into it and lay off thousands of employees.

What happened: Tech companies are simultaneously increasing AI spending and cutting workforces. Meta announced layoffs of about 8,000 employees and scrapping 6,000 open positions; Microsoft offered voluntary buyouts. Meanwhile, Big Tech announced $740 billion（約120兆円） in capital expenditures this year so far—a 69% increase from 2025. Yet executives report that AI's compute costs exceed employee salaries: Nvidia's Bryan Catanzaro stated 'the cost of compute is far beyond the costs of the employees.' A 2024 MIT study found AI automation would be economically viable in only 23% of roles where vision is a primary part of the work.

Why it matters: Despite no widespread data showing AI displacing jobs, and with human labor remaining cheaper, companies are burning budgets faster than planned. Uber's CTO said the company 'burnt through its entire 2026 AI coding tools budget by April' after pushing adoption through leaderboards. AI professor Keith Lee describes this as 'a short-term mismatch,' driven by high hardware and energy costs for providers. The behavior reveals that companies view AI not primarily as a cost-saving substitute for labor today, but as a strategic bet on future viability—even at current financial loss.

What to watch: According to Gartner, performing inference for a large language model with 1 trillion parameters is projected to drop by more than 90% over the next four years. Lee predicts AI companies will shift from flat subscription pricing to usage-based models, and that a true tipping point will arrive only when AI becomes 'both cheaper and more predictable at scale.' As of end of 2025, about 18% of companies had adopted AI tools, representing 68% growth in adoption rate since September 2025.