Amazon finds cases of AI use causing huge cost overruns RAFE ROSNER-UDDIN — SAN FRANCISCO

Financial Times US
Jul 31, 2026

Amazon staff have identified cases of what they called “catastrophically expensive” cost overruns caused by mistakes in how the company has used AI and a lack of spending controls.

Senior engineers told colleagues in a staff meeting on Tuesday that attempts to switch tasks from conventional programming to using AI models had led to “unplanned” spending, said multiple people familiar with the matter.

Engineers were working to create “automated” guardrails for future projects, among other measures to keep costs down, the people said.

The episode highlights the difficulty that even the biggest tech companies are having integrating AI into their daily operations without overspending.

“It’s difficult to figure out how much anything [AI related] costs,” one senior Amazon employee told the FT.

In a presentation this week, staff were told of one instance in which the company spent $1.8mn on matching author details with listings on the group’s ecommerce website using Anthropic’s Claude Sonnet AI model, despite the deployment failing, the people said.

The spending represented an 860 per cent cost overrun compared with the project’s budget and took five months to detect, they added.

Amazon said: “As with any new technology, we’re experimenting, learning and improving how we use it, including how we drive cost efficiencies.”

Staff were told coding mistakes that were “trivially cheap” in traditional systems were proving “catastrophically expensive” as teams started to use AI models to complete tasks.

Senior engineers told staff that the overspending was not an “isolated” incident. In a separate episode, the company incurred about $541,000 in unexpected costs related to building financial auditing tools.

A third incident, in which AI was being used to improve delivery speeds across its logistics network, incurred $134,000 in accidental spending and took more than a fortnight to detect.

Financial Times: Financial Times

ROIC on all that data center spending will be even higher as their clients blow their compute budgets.