IT firms rethink billing as artificial intelligence reshapes work

“The current time and materials pricing model is ill-suited for AI because productivity gains can be exponential. If a small team powered by AI can deliver the work of fifty engineers, hourly billing quickly becomes incompatible with value. Over time, the market will shift towards hybrid models that combine platform subscription, consumption pricing for AI workloads, and outcome-based fees tied to business results,” said Phil Fersht, CEO of HFS Research.