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AI Costs Soar, Execs Turn to Cheaper Open-Weight Models
12 Nov
Summary
- Nearly 60% of senior executives plan to use cheaper open-weight AI.
- AI spending significantly overshot budgets by 24% on average.
- Open-weight AI models are 87% cheaper than closed-weight alternatives.
Nearly 60% of senior executives at large companies are planning to escalate their adoption of less expensive open-weight AI models in the coming year. This decision is largely driven by significant AI budget overruns experienced over the past year, which averaged 24% above expectations. Consequently, 53% of executives now express concerns regarding AI costs, a notable increase from 45% in the prior year.
Open-weight AI models, which can be downloaded and operated independently, present a cost-effective alternative to cloud-based closed models. These models are on average 87% cheaper per token. The survey indicates that while closed models will persist for tasks demanding higher complexity, the trend favors economical AI solutions.
Capgemini's study, which surveyed 500 executives from companies with over $1 billion in annual revenue across 10 countries, highlights this significant industry pivot. The findings reflect a broader corporate strategy to manage rising technology expenditures effectively.
