AI coding costs likely to exceed average developer salaries by 2028: Report

New Delhi, June 24 (IANS) AI coding costs could exceed the average developer’s salary by 2028 due to rising large language model (LLM) token consumption and the shift to consumption-based licensing models, a report said on Wednesday.

The report from Gartner Inc. said organisations moving from experimentation to scaled deployment of AI coding agents risk steep cost escalation.

AI tokens are the units of data processed by generative AI models. Token consumption directly impacts the cost of AI coding tools, particularly under consumption-based pricing structures.

“Organisations are rapidly moving from experimentation to scaled deployment of AI coding agents, but many are underestimating the financial impact of rising token consumption,” said Nitish Tyagi, Sr. Principal Analyst at Gartner.

“Token discipline will not emerge through developer choice alone, as developers tend to optimise for speed and convenience over cost efficiency.

Without a governed engineering operating model, costs can escalate faster than the productivity gains these tools are designed to deliver,” he added.

The shift from seat-based licensing to consumption-based pricing among AI coding agent vendors is introducing highly variable cost structures for software engineering workloads. Many vendors lack transparency into how token consumption is calculated and billed, limiting enterprises’ ability to accurately forecast and control costs.