Whitepaper
What A CTO Must Budget For AI Coding Tools
Whitepaper

What A CTO Must Budget For AI Coding Tools

A CTO's guide to AI coding tool costs, including per-developer projections, model pricing trends, and sustainable budgeting strategies.

Whitepaper
What A CTO Must Budget For AI Coding Tools
Dr. Brian Scott Glassman
15 minutes
January 2025
14 pages
AI Coding Costs Budget Planning Claude AI GPT-5 Software Development Cost Analysis ROI Developer Productivity AI Tools

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Whitepaper
What A CTO Must Budget For AI Coding Tools
Author: Dr. Brian Scott Glassman
Reading Time: 15 minutes
Published: January 2025
Pages: 14

Details for the Article

Core Take Aways

$1,500-$3,000 monthly per-developer budget recommendations based on usage patterns and team size

Comprehensive cost comparison between Claude AI (Opus/Sonnet) and GPT-5 for coding tasks

Multi-agent coding cost analysis with projections for 1, 3, and 5 concurrent AI agents

Conservative vs aggressive adoption scenarios showing cost equilibrium at $70/hour despite usage increases

Monthly and yearly budget tables for teams ranging from 1 to 100 developers

Executive Summary

This whitepaper addresses the critical question every CTO faces: What will AI coding tools cost per developer? The analysis examines costs for Claude Code and OpenAI's Codex, providing CTOs with practical budgeting frameworks for the next quarter and year.

The analysis arrives at the $1,500 or $3,000 monthly per-developer budget range by calculating hourly costs of running AI coding tools for realistic usage scenarios. The $1,500 budget tier assumes developers use AI coding tools with up to 3 concurrent agents for approximately 3 hours per day, while the $3,000 tier accounts for more aggressive usage with up to 5 concurrent agents running for up to 5 hours daily.

Key findings include: Frontier LLMs will produce more tokens per minute while requiring fewer computational resources, resulting in cost per input/output token declining to approximately $1 per million input tokens and $10 per million output tokens. Both conservative and aggressive adoption scenarios result in daily AI coding costs stabilizing around $70 per hour as efficiency gains balance price deflation.

The whitepaper includes comprehensive cost tables showing monthly budgets for teams ranging from 1 to 100 developers, comparative analysis of GPT-5 vs Claude Sonnet pricing, token generation speeds, and scenario analysis demonstrating how massive usage increases (+300% to +733%) are offset by projected AI price deflation (-50% to -70%).

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