McKinsey addresses paradox of rising enterprise AI costs

McKinsey senior partners Tanguy Catlin and Lari Hämäläinen discussed the paradox of AI cost during a virtual session. They noted that while the cost of intelligence is becoming more affordable, enterprise AI bills are still increasing. This is because companies are consuming vastly more AI, particularly through autonomous agents, even as the cost per unit of capability drops.

The paradox shows that while the cost of producing intelligence is collapsing, businesses are increasing consumption dramatically. This increase is driven by autonomous agents performing more complex reasoning and work. Furthermore, AI vendors are capturing some of these efficiency gains through higher profit margins.