- AI Coding Tools Will Overtake Developer Salaries by 2028
- Token pricing based on usage and results is to blame
- Software vendors currently do not offer enough visibility
Gartner predicts that AI coding tools could cost more than the average developer salary as early as 2028, driven by both increased licensing fee volume and growth in token consumption as providers shift to usage- and results-based pricing.
Since each code generation, refinement, and debugging exercise consumes tokens, organizations end up paying a premium for using productivity-boosting AI.
And analysts warn that many companies significantly underestimate how quickly token usage grows once AI coding becomes common.
Coding with AI is more expensive than paying a developer
“Software engineering leaders are increasingly concerned that spending on token-powered AI is becoming harder to justify, and budgets are often depleted sooner than expected,” explained senior principal analyst Nitish Tyagi.
This comes as companies move from pilot testing to widespread deployment and more developers rely on AI as part of their daily workflows.
While companies face higher costs, they are ultimately rewarded with better results. Developers cite faster delivery, convenience, and better code generation as primary benefits, and are now unlikely to voluntarily reduce token usage if it means they would slow down.
“Token discipline will not emerge solely through developer choice, as developers tend to optimize for speed and convenience rather than cost efficiency,” Tyagi added, pointing out the need for organizational governance.
The report also reveals some industry shortcomings; specifically, that providers do not provide enough visibility into how tokens are counted. As a result, businesses struggle to predict how much they will spend and optimize usage accordingly.
So far, AI has increased its reach in coding, but rising costs could change things as companies step back to hit the sweet spot, keeping costs in check and protecting human roles.
Follow TechRadar on Google News and add us as a preferred source to receive news, reviews and opinions from our experts in your feeds.
