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Should firms hire more or spend more on AI? Companies face dilemma as AI costs surge

Generative AI is becoming a core productivity tool for companies, but costs are rising faster than expected, creating new budget pressures. Some firms are seeing annual AI budgets run out in a month or two, forcing decisions between hiring and AI investment. Executives are increasingly focused on controlling expenses and running models efficiently. Industry executives say top-tier models remain the main driver of spending, even though cheaper models could handle many tasks.