SaaS budgets bulge due to AI

The adoption and implementation of AI is causing “a level of cost volatility that is disrupting budgets across the enterprise,” according to SaaS management firm Zylo in its 2026 SaaS Management Index.

Released in late January, the index analyzed more than 40 million SaaS licenses and $75 billion in spend under management, and identified a near 400% YoY spending jump on AI applications in companies with 10,000+ employees, even as organizations’ SaaS portfolios remained “stable at a glance.”

The index says that employees engaging in shadow AI practices “limited their team’s ability to manage the associated risks.” In plainer terms, they’re expensing more AI-native applications, like ChatGPT, instead of going through a more formal purchase review process.

It’s not as if this is a new phenomenon. A SaaS spending tracking platform in 2023 found that SaaS prices rose 12% YoY on average and that nearly three quarters of vendors had increased their prices that year. Last year, widespread subscription cost increases were seen across the enterprise SaaS market, according to CIO.

The meteoric rise of AI in the SaaS space, Zylo said, has only further contributed to recent cost bumps.

“AI is quickly becoming the most expensive ‘invisible worker’ in the organization,” Zylo co-founder and VP of Strategic Partnerships Ben Pippenger said in a release.

“As more work is absorbed by AI-driven software, companies are adding opaque, usage-driven expenses that are harder to forecast and govern. Proving which AI investments deliver real business outcomes will become increasingly critical.”

A report from The Futurum Group also found that major SaaS vendors of AI-based services are beginning to adopt new pricing strategies amid the volatility. These approaches include pricing services per user, per month; Futurum cited Salesforce’s Flex Credits, Microsoft’s Copilot Credits, and Adobe’s generative credit system as examples.

Savings strategies. Zylo’s solution to AI-driven application bloat is simply for organizations to await the venerated contract renewal period. “Outside of consumption-based pricing models, renewals represent the only opportunity to reduce SaaS spend,” the report said.

“This is where organizations can rightsize licenses, renegotiate pricing, address overconsumption, eliminate redundant applications, and realign contract terms with business needs,” the report continued.

Organizations that want to find savings should have a centralized record with clean data on SaaS contracts, usage, spend, and renewal timelines, according to Zylo.

The platform also recommends prioritizing applications—focusing on high-impact contracts first.