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IrelandAI spending can become hard to stop, DW analysis warns
Information systems professor Martin Mocker argues that fear of falling behind and rising switching costs can trap companies before the profits arrive.
DW News
Story of Why this story? One of DW News's most watched videos since yesterday, with 101,816 views.
Why companies can't escape the AI spending spiral | DW News
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Things we can learn from the video
Press to jump
- 0:36Mocker argues that AI produces business benefits only when companies change how they operate.
- 2:00Research and surveys cited by Mocker illustrate the difficulty of translating AI investment into profitability.
- 2:56Fear of falling behind can make AI spending feel compulsory, even without clear returns.
- 4:18Mocker warns about reducing junior hiring on the assumption that AI can replace entry-level workers.
- 5:13Computing and token costs can rise as companies adopt more advanced AI systems.
- 6:06Dependence on providers can make switching difficult and leave customers exposed to price increases.
Buying AI is not the same as changing a business. That distinction sits at the center of DW News's analysis of why companies may keep increasing their spending without securing the returns they expected.
Reporter Aaron Tilton interviews Martin Mocker, a professor of information systems at ESB Business School and research affiliate at MIT Sloan. "The problem is that the technology alone does not create the benefits," Mocker says. His argument is that companies need to change how they operate, rather than add AI to existing practices and expect the investment to pay off automatically.
Mocker cites research and surveys from IBM, MIT and McKinsey to illustrate the difficulty of turning adoption into profitability. Yet executives' fear of falling behind can make further spending feel unavoidable, he says: AI becomes a cost of doing business before its commercial value is clear.
The report identifies another pressure once companies commit. More advanced systems bring computing and token costs, while deeper dependence on a provider can make switching harder. Mocker points to large cloud commitments by AI developers, including Anthropic, and warns that customers locked into systems could face price increases.
Hiring decisions carry a separate risk. Mocker highlights companies cutting back on junior recruitment because they expect AI to replace entry-level work.
His proposed way out is not simply another technology purchase. It is a rethink of the business itself, with a continuing test of whether each additional expense produces enough additional value.
The business school of Reutlingen University in Baden-Württemberg, Germany. It oversees the university’s business and production management degree programmes.
More on Wikipedia ›The business school of the Massachusetts Institute of Technology, a private university in Cambridge, Massachusetts.
More on Wikipedia ›An American strategy and management consulting firm serving companies, governments and other organisations. Its work focuses mainly on clients’ finances and operations.
More on Wikipedia ›An American artificial intelligence company based in San Francisco and structured as a public benefit corporation. It aims to develop artificial general intelligence and superintelligent systems.
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- Channel
- DW News
- Subscribers
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- Channel views, last 7 days
- 18,650,993
- Channel views, pace per day
- 1,305,077 (on a normal day: 2,862,167)
- Video published
- November 12, 2026
- Video views so far
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- Video views, pace per day
- 101,800
The numbers
DW's AI spending analysis drew about 102,000 views since yesterday, making it the channel's second most-watched new video over that period.
💡 Test your knowledge
What does IBM stand for?
IBM is short for International Business Machines, one of the companies whose research Mocker cites.