The total cost of AI ownership for businesses (2026)
Build a three-year AI budget that includes subscriptions, usage, training and review. A worked business example with assumptions you can replace.
An AI budget pays for access to the software and for the work around it: preparing files, training colleagues, checking results and maintaining any integrations. Total cost of ownership brings those costs together over a defined period. Keep supplier payments separate from the value of your team's time so you can see what each means for the budget.
The OECD's 2026 D4SME survey identifies time constraints, maintenance costs and skills gaps as obstacles to putting digital tools to work. Its sample is not representative, so it cannot establish an average AI cost for a small business. Your own workload is the useful starting point.
If you are still choosing that workload, see our guide to generative AI for business. The worked example below follows a hypothetical company with twenty users.
What belongs in the total cost of AI ownership?
AI total cost of ownership, or AI TCO, includes setup, recurring supplier charges, internal operating time and a planned exit over the period being compared. A three-year budget captures the initial training effort and the costs that continue after a pilot.
The basic calculation is:
Three-year cost = setup + year 1 costs + year 2 costs + year 3 costs + planned exit.
Count each item once. If setup is already in year 1, do not add it again outside that year. If a subscription includes credits, add only usage purchased beyond that allowance as a separate cost.
Keep two subtotals. Supplier payments cover licences, metered use, external services and hosting where relevant. Internal time is hours multiplied by your business's hourly employment cost. Much of that second amount may already sit within payroll; it needs extra cash only when it leads to overtime, hiring or other additional payments.
Set a clear scope for the comparison. A budget for producing reports should include preparing the data and checking the reports. Apply the same boundary when costing the existing process or another tool.
Three ways businesses pay for AI
You can buy subscriptions per user, commission an application that uses model APIs, or use a workspace with credits. Compare them against the same task, output quality, data requirements and support needs.
| Buying route | What goes in the budget | What to establish before buying |
|---|---|---|
| Subscriptions across one or more tools | Paid accounts, add-ons, annual commitments and usage outside the allowance | Who needs each account and how licences can be reduced at renewal |
| APIs with an agency or internal development team | Design, integration, usage, hosting, testing and maintenance | Separate setup and running costs, with someone responsible for incidents |
| A workspace using credits | Any subscription, additional credits, and time spent using and checking the output | What consumes credits, what the plan includes and what happens when funding runs out |
An API lets software send requests to a model. Budget for development when you need AI to work inside another business system. For writing documents or analysing spreadsheets, first check whether an existing tool can do the job.
List the owner and next renewal date for each subscription. Several tools may be justified for one employee. You should be able to identify the work that makes each account worth paying for.
Why costs grow as people use AI more
AI costs depend on both the number of jobs and the work required to complete each one. Even with a fixed user count, longer documents, extra versions and more checking can increase metered use and staff time.
For services billed in tokens, budget for the text the model receives and generates according to the contract. Tokens are the fragments of text used to measure that processing. An application may also perform searches, call tools or make several attempts; ask for those steps and any associated charges to be included in the estimate.
Track a complete job, such as preparing a supplier comparison. Record the files used, attempts needed, billed consumption and time until someone accepts the finished document. The FinOps Foundation includes workload and value measures in AI unit economics, alongside technical measures.
Build three scenarios: limited adoption, expected use, and heavier demand with more review. Change users, consumption and hours independently. Unused subscriptions require a different response from a useful service whose workload is growing.
Hidden costs in a team of 5 to 200 people
Look for work someone must do even when it never appears on a supplier invoice: training, preparing information, reviewing output and administering access. Give each activity an owner and measure the time during your pilot.
Training and support. Include learners' time and the time spent preparing examples, answering questions and updating instructions. For recurring tasks, save an accepted example with the criteria used to approve it.
Preparing information and repeating context. Someone must organise the file, explain an ambiguous column or remove information that should not be shared. Count repeated preparation when people do the same work in several tools.
Checking and correcting. Figures, sources, commercial terms and formatting need a check before delivery. Include rejected attempts in the cost: they used time even though they produced nothing you could send.
Administration and data handling. Allow for supplier reviews, access changes and any specialist advice the proposed use needs. Requirements vary with the task and the data; there is no universal annual compliance fee for an AI project.
Changing tools. Establish how to recover files and instructions and what moving them would involve. Keep a copy of essential business documents outside the chat.
In a five-person business, the owner may handle several of these jobs. As a business approaches two hundred people, collect estimates across departments: procurement, IT and the people approving deliverables may all contribute time to the same project.
A worked three-year AI cost model
Under the assumptions below, a twenty-user business would allocate €50,960 to AI over three years: €28,000 in supplier payments and €22,960 in internal time. This is a hypothetical calculation to demonstrate the method, with no actual Ilisai prices or measured customer results.
All amounts are in euros, excluding VAT, with constant prices and twenty users throughout. The invented subscription costs €30 per user per month, with another €150 a month bought as usage outside the subscription allowance. Internal time is valued at €35 an hour; replace that assumption with your own employment cost.
Setup takes €1,000 of external services and forty internal hours. Each user spends three hours on training in year 1 and one hour in each later year. Across the whole team, administration and review take fourteen hours a month, with twelve hours set aside at the end for exporting files and handing over the work.
| Example cost, EUR | Year 1 | Year 2 | Year 3 |
|---|---|---|---|
| Subscriptions: 20 × 30 × 12 | 7,200 | 7,200 | 7,200 |
| Additional usage: 150 × 12 | 1,800 | 1,800 | 1,800 |
| External setup | 1,000 | 0 | 0 |
| Internal setup: 40 × 35 | 1,400 | 0 | 0 |
| Training: users × hours × 35 | 2,100 | 700 | 700 |
| Administration and review: 14 × 12 × 35 | 5,880 | 5,880 | 5,880 |
| Export and handover: 12 × 35 | 0 | 0 | 420 |
| Total | 19,380 | 15,580 | 16,000 |
That gives 19,380 + 15,580 + 16,000 = €50,960. Internal time adds up to 656 hours over three years. We have not calculated savings: that requires the cost and quality of the work this company did before adopting AI.
Download the editable three-year AI cost worksheet (XLSX). It contains sheets in Spanish (ES), English (EN) and French (FR). Replace the blue input cells for each year with your own figures; the grey result cells calculate the totals.
Add any relevant hosting, maintenance contracts, specialist review or unrecoverable taxes. This example excludes financing, inflation and hypothetical incident losses. For a project with significant capital spending, extend it with your finance lead.
Try two changes separately. Increasing additional usage from €150 to €300 a month throughout the period raises the total to €56,360. Keeping usage unchanged but doubling monthly administration and review from fourteen to twenty-eight hours raises it to €68,600. For these assumptions, measuring review effort makes a bigger difference to the estimate than refining the usage figure.
We generated and downloaded the file in Ilisai's test environment, checked its inputs and formulas against this example, and recalculated the baseline total and both scenarios above. The figures remain illustrative assumptions; use your own costs and measurements when planning a project.
Copy this prompt to rebuild the example or adapt it to your figures. This reusable version condenses the worksheet specification; the original test used more detailed instructions.
1Create a three-year AI cost workbook in EUR, excluding VAT, with localized ES, EN and FR sheets. Row 3, columns A:E: cost item, Year 1, Year 2, Year 3, three-year total.
2
3For the hypothetical example, put these inputs in B:D:
4Row 4 — paid users: 20 / 20 / 20
5Row 5 — subscription per user per month: 30 / 30 / 30
6Row 6 — additional usage per month: 150 / 150 / 150
7Row 7 — external setup: 1000 / 0 / 0
8Row 8 — hourly employment cost: 35 / 35 / 35
9Row 9 — internal setup hours, whole team: 40 / 0 / 0
10Row 10 — training hours per user: 3 / 1 / 1
11Row 11 — administration and review hours per month, whole team: 14 / 14 / 14
12Row 12 — export/handover hours, whole team: 0 / 0 / 12
13
14Use these spreadsheet formulas and labels for year 1:
15B14 subscriptions =B4*B5*12
16B15 additional usage =B6*12
17B16 external setup =B7
18B17 supplier payments =SUM(B14:B16)
19B18 internal setup =B9*B8
20B19 training =B4*B10*B8
21B20 administration and review =B11*12*B8
22B21 export and handover =B12*B8
23B22 allocated internal staff time =SUM(B18:B21)
24B23 total cost =B17+B22
25
26Leave E4:E12 blank. Copy the formulas to C:D with relative references. Put =SUM(B14:D14) in E14 and fill down to E23. Use editable blue inputs and grey formula cells. Count only usage bought outside the subscription in row 6; identify staff time as allocated payroll cost.
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28If I request a version for my business, ask for missing inputs before calculating. Never invent them or replace them with zero. Mark the example as hypothetical and return a downloadable XLSX.How to reduce costs and assess the return
Remove spending that does not contribute to acceptable output and compare the cost per completed job. To assess the return, measure the old process at the same volume and quality standard.
Choose a recurring task. For a sample of jobs, record preparation, generation and correction time, tool costs and whether the person responsible accepts the result. Divide by accepted jobs, while retaining the cost of failed attempts.
Use what you find to make changes. Cancel licences nobody needs, reuse instructions that have worked and test a less expensive option on work it can complete to the required standard. If you shorten the context, check that you have retained the information needed for a correct answer.
Freed time produces cash savings when it avoids a payment. If colleagues use those hours to serve more customers or clear a backlog, record that extra capacity separately. Multiplying every minute saved by an hourly employment cost does not establish money returned to the business.
In the enterprise: renting capacity or owning infrastructure
An enterprise considering its own infrastructure needs to compare a defined workload with contracted alternatives. Include actual utilisation, operating staff, availability, power, support and equipment renewal over the same time horizon.
Manufacturer studies can help identify the variables. Lenovo's 2026 comparison, for example, uses a five-year lifecycle and leaves storage, data egress and support out of its cloud calculation. Its conclusions depend on those assumptions; they do not provide an office AI budget.
Require both proposals to perform the same task at comparable quality and response times. Purchased hardware still costs money while idle. Cloud contracts may also commit you to capacity you pay for even when it is unused.
Procurement and finance should review demand scenarios and exit terms together. If the business needs control over where and how models run, include those requirements at the start; our guide to sovereign AI for business explains the distinctions.
Where Ilisai fits in the budget
Ilisai brings available models from its catalogue into one workspace for cited research, documents, images and data analysis. Billing uses credits, with 1 credit equal to €0.01, and consumption is blocked when it cannot be funded.
With the AI document generator, you can generate and download a budget as an XLSX file, check the formulas and adjust the assumptions. Your cost model still includes preparation and review, any other tools you keep, and integrations you commission separately. A workspace does not by itself include a custom build or establish a saving.
Use the pricing page for plans, included credits and conditions to fill in supplier costs for your intended use. You can start with the Free plan's limited allowance.