- AI coding tools set to exceed developer salaries by 2028
- Usage and performance based token pricing is to blame
- Software vendors currently do not provide enough visibility
Gartner predicts that AI coding tools could cost more than the average developer’s salary as early as 2028, driven by both an increased volume of license fees and growth in token consumption as vendors shift to usage- and performance-based pricing.
With every code generation, refinement, and debugging exercise that uses tokens, organizations end up paying a premium to use productivity-enhancing AI.
And analysts warn that many companies are significantly underestimating how quickly token usage will grow as AI coding becomes mainstream.
AI coding is more expensive than paying a developer
“Software engineering leaders are increasingly concerned as token-driven AI spending becomes harder to justify, with budgets often exhausted earlier than expected,” explained Senior Principal Analyst Nitish Tyagi.
This comes as companies move from pilots to widespread deployment and more developers rely on artificial intelligence as part of their daily workflows.
While companies face higher costs, they are ultimately rewarded with a higher bottom line. Developers cite faster delivery, convenience and better code generation as core benefits, and are now unlikely to voluntarily reduce the use of tokens if it means they would slow down.
“Token discipline will not arise through developer choice alone, as developers tend to optimize for speed and convenience over cost efficiency,” Tyagi added, noting the need for organizational governance.
The report also reveals some industry shortcomings; specifically, that vendors do not provide sufficient visibility into how tokens are counted. As a result, companies struggle to predict how much they will spend and optimize usage accordingly.
Until now, AI has extended its reach across coding, but skyrocketing costs could change things as companies scale back to hit the sweet spot, keep costs under control and protect human roles.
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