European firms confront rising AI coding costs and growing shadow‑AI use

Market research firm Gartner warns that token‑based pricing for generative AI coding tools could make AI‑assisted development more expensive than hiring a software engineer by 2028. The firm cites rapidly increasing token consumption and a shift to usage‑based billing, noting that in some regions token costs for a developer already exceed salaries – for example, in India costs of $2,000‑$5,000 per developer compare with average monthly wages of about $2,000. Companies such as Uber have reported that their annual token budget was fully exhausted, while German firms expressed surprise at the expense of their AI deployments.

A separate Dutch survey of more than 1,000 employees shows that one in five workers has purchased a private AI subscription for work, often without organizational oversight. Only 43 % say their employer provides clear AI guidelines, and just 35 % feel adequately informed about AI use. The rise of “shadow‑AI” – unofficial AI tools used outside IT control – raises compliance and data‑leak risks, especially as the European AI Act, effective from February 2025, obliges companies to ensure AI literacy among staff. Experts urge firms to inventory AI tools, offer approved alternatives, and communicate permissible usage to mitigate hidden threats.