AI Spending Overshoots Forecasts Due to Activity, Not Headcount

The Common Question

Why does our AI budget keep going over forecast every quarter?

The Lesson in This Case

AI budgets are overshooting forecasts not because spending is out of control, but because the old headcount-to-license formula never accounted for software that generates output independent of staff size. The real cost driver is activity volume – customer interactions, automated workflows, and product features that consume compute whether or not a single new employee was hired. CFOs who separate experimental AI workflows from operational ones, assign each a defined evaluation period and measurable return threshold, and build transparency into which workflows actually earn their infrastructure costs will stop being surprised by invoices and start making deliberate capital allocation decisions.

Originally reported by CFO Dive. Read the full story here.