Nearly one-third of executives don't understand AI's cost structure, KPMG finds

A new survey by accounting firm KPMG indicates that many business executives are hesitant about the economic implications of adopting artificial intelligence (AI). The study, which polled 2,145 senior managers across 20 countries, found a substantial number of leaders are grappling with understanding AI's cost structures.

Specifically, 29% of respondents reported not understanding the drivers behind the increasing costs associated with AI usage. Furthermore, nearly one-third admitted to not grasping the economic calculations of AI, a confusion that is hindering the true deployment of these technologies in workplaces.

The report's authors noted that as the pay-per-use model becomes more prevalent, many organizations are still developing the capabilities to effectively forecast, monitor, and manage their AI expenditures.

This finding suggests that the era of AI as a simple, fixed-cost tool is ending. As usage-based billing becomes the norm, companies must now clearly understand the financial commitment and return on investment AI provides, highlighting a need for better financial planning and strategic understanding of AI implementation.