Find the exact volume where AI-assisted work becomes cheaper than human-only work. Compare cost per output, see the break-even crossover point and understand when AI genuinely saves money.
AI has high fixed costs (subscription) but low variable costs per output. Human workers have no fixed cost but constant variable cost per output. This creates a break-even volume — below it, human-only is cheaper; above it, AI-assisted is cheaper. Understanding this crossover for your specific tasks and volumes is essential for making rational AI investment decisions.
The break-even volume is where: AI fixed cost + AI variable cost per unit × volume = Human cost per unit × volume. Rearranged: Break-even volume = AI fixed monthly cost ÷ (Human cost per unit − AI variable cost per unit). At high volumes, AI almost always wins on cost. At very low volumes, the fixed subscription cost makes human-only cheaper per unit.
AI often has higher error/review rates than human experts for complex tasks. Include the time cost of reviewing AI outputs in the AI cost model. A 15% review rate at 5 minutes per reviewed output adds 0.75 minutes to average AI output time — which narrows the cost advantage over human work. For tasks where review is quick, this barely matters; for complex judgement tasks, it can eliminate the AI advantage entirely.
AI costs often decrease at scale (volume discounts, efficiency improvements, prompt optimisation) while human costs increase (more staff, management overhead). This means AI's cost advantage typically widens as volume grows. The break-even volume where AI becomes cheaper is also the point where AI begins building a compounding cost advantage over time.
AI is cheaper when: Monthly volume × (Human cost per unit - AI variable cost per unit) > AI fixed monthly cost. Example: human costs £18.75/unit (45min × £25/hr), AI costs £6.25/unit (15min × £25/hr) variable + £100/month fixed. Break-even: £100 ÷ (£18.75-£6.25) = 8 units/month. Above 8 units, AI-assisted is cheaper. At 200 units/month: AI saves £2,400/month vs human-only.
Quality is the critical variable often omitted from cost comparisons. If AI produces outputs requiring 30 minutes of human review and correction per unit, the true AI time per unit may be longer than the stated "15 minutes". Always benchmark AI quality on actual representative samples before building a business case. The best AI ROI comes from tasks where AI quality is close to human quality AND AI is significantly faster.