Business · Updated 16 Oct, 06:06 pm IST
Zoho warns rising AI costs squeeze SaaS margins; pauses hiring and raises
Why it matters for readers: AI tools help build software faster, but their real-world running costs are rising and affecting business decisions.
- Sridhar Vembu said server prices have risen 4–5X in a year and AI usage and token spending are pushing up operating costs.1
- Zoho will reduce marketing spending, freeze hiring for 18 months and pause routine salary hikes this year.1
- Vembu argued AI productivity gains (measured across product development) are about 25–50%, which may not offset higher running costs.1
- Companies like Freshworks (proposed acquisition of Torii) and Perfios are taking steps to make AI adoption more cost-effective.1
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