Businesses are re-evaluating their significant investments in artificial intelligence as rising operational costs begin to outweigh the technology's perceived value. Initially offered at low prices to attract users, AI services are now facing increased expenses.

AI is getting expensive – and companies are starting to rethink their embrace of the disruptive technology. Playing by a well-worn Silicon Valley playbook, artificial intelligence companies charged rock-bottom prices to hook customers after ChatGPT burst onto the scene. Kevin Simback of start-up incubator Delphi Labs calls it the era of “subsidised intelligence” – meaning investors were basically footing the bill so companies could offer AI on the cheap. “But the tides are beginning to turn,”...