AI costs now exceeding staff salaries, say Uber, Nvidia

Companies expanding their use of Artificial Intelligence are facing rapidly rising costs, with some firms now spending more on AI computing power than employee salaries, executives at Nvidia and Uber have said.

According to a report by The Economic Times on Friday, Nvidia Vice-President of Applied Deep Learning, Bryan Catanzaro, said AI-related computing costs had become a major financial burden for some teams.

Catanzaro said: “For my team, the cost of compute is far beyond the costs of the employees.”

The comments reflect growing concerns over the financial impact of AI adoption as companies increase spending on coding assistants, AI agents and automated workflows.

Unlike consumer AI chatbots that operate mostly on subscription plans, enterprise AI tools are often billed based on token usage, with costs increasing as businesses run continuous AI-driven operations.

Uber Chief Technology Officer, Praveen Naga, said the company’s AI spending had already exceeded internal expectations.

Naga said: “(I’ve) gone back to the drawing board because the budget (I) thought (I) would need is blown away already.”

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The issue is also affecting startups experimenting heavily with AI tools.

Swan AI founder Amos Bar-Joseph disclosed in a LinkedIn post that his four-person company received a $113,000 bill from Anthropic, the company behind Claude AI.

The amount translates to roughly $28,000 per employee within one month.

The rising expenses have reignited debate over whether AI is genuinely cheaper than human labour.

A 2024 study by researchers at the Massachusetts Institute of Technology reportedly found that humans completed tasks more efficiently in 77 per cent of the cases examined.

Despite the concerns, companies continue investing aggressively in automation technologies.

Uber’s Naga said AI agents already account for 11 per cent of the company’s live code updates.

He said: “The vision for [me] as a CTO is to transform from software engineering to [AI] agent software engineering.”

The report also stated that Nvidia CEO Jensen Huang is encouraging engineers to increase their use of AI tools.

According to the report, Huang wants engineers earning $500,000 annually to spend at least $250,000 yearly on AI tokens.

Businesses are now weighing whether the current high costs are temporary investments before AI systems become more efficient or whether token and computing expenses will remain a long-term operating burden.

The report added that companies rushing into AI adoption without clear strategies risk heavy financial losses as many firms continue struggling to generate meaningful returns from AI investments.

Even with the rising costs, layoffs linked to automation are expected to continue as businesses test the long-term economics of AI-driven workforce reduction.

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