Why Is AI So Expensive For Business?

Why Is AI So Expensive for Business?

The exponential advancement in technology has led to various tools that make businesses and organizations more efficient. One amazing tool that is making incredible progress is Artificial Intelligence (AI). It can take any organization to a whole new level, but many cannot implement it because of the cost.

AI is so expensive for business because it’s still in the early stages of its development and is often proprietary or specific. Many of the developers are large-scale companies like Google, Amazon, IBM, or Apple. The good news is that there is AI out there for small businesses and can greatly enhance their efficiency and profits.

Several factors affect the actual cost of developing AI, and we’ll cover all of them in great detail. Stick around because this will be an interesting discussion that talks about the state of AI development. We’ll also talk about why AI is a growing threat to the working population.

The State of AI in Business

The State of AI in Business
The State of AI in Business

AI, coupled with technology, is growing to new levels every year. With the new breakthroughs of ChatGPT 4 and Google’s Bard, it will only continue to accelerate.

Many businesses rely on it to increase efficiency, improve their products, or scale and gain an edge over their competitors. AI is one of the fastest-growing trends in tech that can help companies expand their operations or create a whole new industry.

AI development companies are involved with everything from creating cancer cell MRI analysis scans to creating deep learning high-definition map engines for self-driving vehicles. Small businesses can also use many programs available to them that are using AI already in the background.

The investments pouring into AI often come from large corporations that can greatly benefit from integrating AI into their current system. Small businesses are still often at a disadvantage with access to AI and the ability to use those tools to help them manage their day-to-day operations because of the costs associated with AI development.

Please see some of our other interesting articles on AI, like “Do You Need a Ph.D. To Work in AI?” or “Is AI Better Than Humans at Chess?”

Myths About AI Business Implementation 

Myths About AI Business Implementation 
Myths About AI Business Implementation 

Artificial intelligence can do amazing things for companies by utilizing their data, learning, and implementing that information in beneficial ways.

AI is helping businesses every day by working behind the scenes, but is important to calculate the costs for your establishment. Although it can help many companies improve their bottom line and be purchased for some applications with little effort. AI implementation from the ground up for a small business may not be cost-effective, where it wouldn’t make sense for a small business to invest. 

Here are some of the most common myths about the true cost of AI:

AI Is an “Off the Shelf” Plug-and-Play System

Many people believe you can just purchase an AI product for their business, and it will run seamlessly in your systems once you integrate it. There are such products out there and many that we have listed below and recommend for small businesses, but some companies will need to create their own AI system for their specific needs. 

The truth is that even with AI, you’ll still need to do a lot of things to make it work; it needs labor, time, training, maintenance, frequent updates, and fixes to ensure that it works properly.

AI Can Train Itself

We’ve all heard the news about self-learning AI that gets more efficient over time. Working with machine learning algorithms that can teach themselves with new data is often true with a lot of work and time. Much of this industry and its programs are still in their infancy and still need consistent input from its developers. 

You still will need to have data already or attain additional data at a cost to train the AI and point it in the right direction, many times for years, to have it function properly. Most AIs won’t perform well without intervention, especially if they encounter problems they cannot handle.

The AI Already Has The Data

Many businesses are looking for AI companies that can provide them with a system that can make them more efficient. The truth is that AI needs to learn your data before it can function properly. Good Data is essential for Artificial Intelligence to work properly.

For instance, according to Rand Corporation’s current estimates, autonomous vehicles will need to utilize 11 billion miles of road training before they can match a human driver’s capabilities. That’s a lot of miles and would take hundreds of years in physical testing if it wasn’t for AI simulations and lots of data.

If you do not already have that data, some companies can purchase and utilize generally available data that will work. If that does not work, then the data needs to be developed. So unless the developers designed it specifically for your business, it wouldn’t have all the data it needs to help your business excel.

AI Is a One-Time Expense

The biggest misconception about AI is that you don’t have to do anything for it in the future once you develop it. Artificial Intelligence can be more efficient over time, but it is also susceptible to gradual deterioration. In data science, we refer to it as “drift,” which requires consistent maintenance and adds to the overall cost of using AI.

Large corporations have the financial capacity to handle these costs, but it’s quite different for small businesses. So, even if using artificial intelligence can help a company improve its bottom line, these improvements may not be enough to cover the real cost of developing and managing AI.

You Are Turning Your New AI Over to Your IT Department

For sure, whether you have your own IT department or a vendor or subcontractor, you will not just be buying and handing your new AI program to them when it is brand new. As with many departments in companies, they are overworked and understaffed.

Most IT departments are not prepared to integrate an AI system into an operational business infrastructure on their own.

The job of IT professionals is to keep your network running at top efficiency for production by your staff. Implementing AI in your company will take a dedicated team for the task with their own budget and workforce until it runs on its own. Any other scenario is not realistic.

Is AI Cheaper Than Humans?

Elon Musk said at the AeroAstro Centennial Symposium that AI is “our biggest existential threat.” He may be referring to the existence of humanity in the long run, but we’re already seeing some short-term effects of AI in most people’s lives.

In the past, every factory employed human workers; every business ran with 100% human resources. Nowadays, we can see many businesses that heavily rely on AI and robots for their operation. An accounting and consulting firm, PwC, released a report saying about 38% of all the jobs in the U.S. will be automated by 2030.

When we see these numbers, we couldn’t help but wonder whether AI is cheaper than humans or not. After all, more and more businesses prefer AI and robots, right? There are two ways to look at it, and just by looking at the actual cost, AI isn’t necessarily cheaper than humans, at least in the short term.

Initial and Long-Term Costs of AI and Robots

If you’re going to look at the initial cost, AI and robots are far more expensive than hiring humans to do the same amount of work. However, if you look at the long-term cost of hiring humans compared to AI and Robots, Humans can be more expensive. Add that to the fact that AI won’t get sick, not show up, or take paid vacations, which can quickly eat up any company’s bottom line.

At this stage of AI development, it’s really hard to say with certainty that AI is cheaper than humans. There are several factors that businesses need to consider; an industry that may thrive well with AI doesn’t necessarily mean that another sector can expect the same.

However, outside the operating cost, there is one important factor that many people fail to consider: the machine’s capabilities. Artificial intelligence, even at its current state, does many specific tasks extremely efficiently and well. Couple that with a say, an industrial robot, and you have achieved a comprehensive labor force.

Examples of Companies Using AI

Examples of Companies Using AI
Examples of Companies Using AI

If you look at Google and Facebook using AI in their companies, for example. These companies use AI to get rid of unwanted content on their platform almost instantaneously. They even use AI to ban fake accounts and spammers without human intervention.

If you consider the scale of their operations, it doesn’t matter if humans are cheaper than AI. The fact that no human can do what their AI does by “scraping” their entire platform with billions of entries and getting rid of much of their unwanted content at lightning speed greatly outweighs its cost.

So at this point, AI may still be expensive and may not make a lot of sense for some small businesses. But it helps large companies do well, regardless of the amount they are spending on its development. This trend will also change and benefit small businesses as AI technology advances and becomes cheaper and more available.

AI and Small Business

One way small business is utilizing AI and probably does not know it is by using programs such as Quickbooks, which has AI integrated into it already. Quickbooks uses Artificial intelligence to predict and manage cash flow and is utilized in QuickBooks Payments with its attributes.

Other programs utilizing AI are Salesforce which can boost sales and marketing with AI-Powered CRM Systems. You can enhance your company’s customer communication with an AI Chatbot like ChatBot.com or Drift

Small businesses can purchase AI programs and scan thousands of job applications to find the ones that most closely match their hiring parameters with programs like Zenefits and UKG, to name a couple. AI will permeate the future of small businesses in many ways in the future.


AI may have what it takes for businesses to get to a whole new level. However, it’s still in its infancy to some degree, and most small businesses can’t take advantage of this technology yet. But as we have discussed, this will most definitely change as AI becomes more readily available to the average person and in small businesses,

AI is on course to completely change civilization as we know it, but it still has to go through various developmental stages. Still, it’s something that we should always look into because of its potential to make businesses and organizations more efficient.


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John Mortensen

As a kid I wanted to be an astronaut, geologist, or scientist. I became a project manager which is involved with many of those things. I am a project manager and tech writer who researches the latest alternative and green technologies. We write helpful articles about green electronics and green technology products. AI, extreme weather, electric vehicles, are all in our future and we want to know the best way to deal with the effects of these on the power grid and emergency preparedness. https://techevaluate.com/author-bio-page-john-w-mortensen/

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