As business leaders look to move forward with artificial intelligence initiatives for their companies, the costs of those projects remains top of mind: especially as prices for AI-enabled tools continue to grow. AI software prices have risen between 20% to 37%, regardless of vendor category, data released in December by Tropic, a provider of procurement software solutions, found, representing what the company has termed the “AI tax.”

Additionally, “‘AI justification’ is frequently disconnected from new functionality, with pricing rising faster than perceived incremental value,” the company found. Moreover, many vendors are bringing AI into their offerings without giving their users the choice of opting in or out, Tropic Co-founder and Chief Operating Officer Justin Etkin said.  

“When we see good practices around expansion and growth, customers have an opportunity to opt in to whatever that new solution is and buy into the innovation and improvements it'll drive for their organizations,” Etkin said in an interview. “In these cases, what's happening is that AI is being bundled in without a choice, and so users don't have the opportunity to opt out anymore.”

Getting the timing right

Vendors and businesses are still examining AI’s potential, with both legacy software and software-as-a-service solutions integrating the technology throughout their products and offerings. SaaS vendors such as Salesforce and Microsoft have updated their pricing structures and bundled new AI features into their offerings, CFO Dive previously reported, citing data from SaaS management provider Zylo. Salesforce, for example, raised prices by 6% on average last August as it continued to expand its fleet of agentic AI solutions.

For companies and software buyers, the main challenge associated with such new features, or their associated cost hikes, is timing: many only find out about the changes a month or two in advance, “maybe 90 days before their renewal…where they don't have sufficient opportunity to even evaluate, ‘is this uplift one that is intolerable to me as an organization?’” Etkin said.

Etkin has served as Tropic’s COO since co-founding the procurement software provider in 2019 with CEO David Campbell, according to his LinkedIn profile. Past roles include serving as VP of operations for fellow software provider Wunderkind, and a three-year span at Bain & Company.

Some vendors are also bundling AI into existing features before increasing pricing and treating AI as an add-on, Tropic’s data found. As they are not enabling customers to opt in to such tools, “they are requiring the forced upgrade to the solutions and packages and bundles that now include those AI capabilities, and calling it growth driven by AI, even though it's not a proactive choice that their customers are making,” Etkin said.

For companies, gaining faster insight into such upgrades or re-bundling processes is crucial, Tropic’s data, a survey of its customers, found.

Having that visibility “makes your leverage going into those discussions that much more powerful, because you can craft a strategy,” Etkin said. You can come up with a plan for that supplier in particular, whether it's a competitive bidding scenario or gathering feedback across the organization, to showcase your perceived lift on the AI tools that are now being incorporated  into the offering.”

One eye on risk  

For CFOs, ongoing pricing changes with AI-enabled solutions represent another wrinkle as they try to achieve the age-old balancing act between risk and reward. Finance chiefs are “encouraging” when it comes to AI’s potential, Etkin said, urging experimentation within their teams — but they are still keeping one eye on risk.

“We see with a lot of CFOs that they're on their front foot, but they're trying to create an innovative posture and encourage it internally, while still creating the necessary guard rails to control for compliance and risk profiles,” Etkin said. However, many are still willing to stretch their spending in what are still AI’s early days, he said.

 “We are very much in a period of time where there's a loosening on cost controls from the office of the CFO in testing and trying out these different solutions, because the belief is that the time savings and ROI benefit can far outweigh the cost,” Etkin said.