Microsoft reports AI is more expensive than paying human employees

Microsoft is canceling most of its internal Claude Code licenses after employee adoption became unexpectedly expensive, with the company finding that AI tool costs now exceed the salaries of human employees. Similarly, Uber exhausted its entire 2026 AI coding budget in just four months despite incentivizing employee usage, suggesting that the economics of AI adoption are more complicated than anticipated. While token prices are expected to drop significantly by 2030, increased consumption from advanced AI agents will likely drive overall enterprise AI costs higher, challenging companies' productivity and cost-reduction goals.