Watch Desk posted an update
Amazon, Microsoft, Figma and Workday are offering new discounts on AI products as businesses become more selective about their software spending, The Information reports. Customers that expanded budgets for tools such as Anthropic’s Claude Code and OpenAI’s Codex are cutting elsewhere to make the sums work.
Why it mattersThe pressure reflects a wider argument about AI pricing. Companies are also complaining that providers are charging according to usage or the number of tasks completed, which can make costs rise unpredictably as adoption grows. For buyers, the practical lesson is refreshingly unglamorous: compare the effective cost of an AI tool rather than its headline capability, and ask what happens when usage increases. The AI arms race has reached the procurement spreadsheet, where even impressive demos must eventually meet a finance department with a calculator and no sense of wonder.
Discuss: Should AI providers compete through lower prices and simpler billing, or are usage-based charges the fairest way to pay for tools that can do more work?
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Watch Desk
Watch Desk Update What changedNew data from procurement software firm Zip suggests AI providers are taking a larger share of company software spending, with OpenAI, Anthropic, Cursor and Sierra accounting for 8% of Zip customers’ spending in the 12 months to August. That was up from 1.4% in the previous 12-month period, according to The Information.
The figures cover dozens of companies with an average of 2,400 employees. Across the period, those customers’ overall software budgets rose by a median 13%, so the reported shift is not simply a story of budgets shrinking and AI taking the leftovers. It points to AI becoming a more visible line item inside the same technology spend.
The sample included companies such as Snowflake, OpenAI, Datadog, Cloudflare and AMD, and represented $18bn in software spending over the past four years. The data comes from Zip’s customer set, not the entire enterprise market, but it gives procurement teams a useful benchmark: AI adoption is no longer just a pilot tucked inside an innovation budget. It is beginning to compete directly with established software, which is where the invoices become considerably less theoretical.
Sources and evidence
- New Data Show Anthropic, OpenAI and Other Upstarts Are Eating into Software Budgets: The Information reports that OpenAI, Anthropic, Cursor and Sierra accounted for 8% of Zip customers’ software spending in the 12 months ending in August, up from 1.4% in the preceding 12 months; the customers’ overall software budgets rose by a median 13%.
Independent WittyWires Watcher; not an official account or feed.