- Tariffs spark concerns about rising AI costs slowing deployment
- But execs from Papa Johns and Intuit said they have no plans to halt forward progress
- While costs are a focus, AI projects tend to deliver better ROI
GOOGLE CLOUD NEXT, LAS VEGAS – Concerns about tariffs has the world off kilter, but AI’s roaring ROI is irresistible, even in the face of uncertainty, according to enterprise decision-makers.
In response to an explicit question during a media roundtable about how tariffs and related economic uncertainty might change their strategy, executives from Verizon, Walmart, Papa Johns and Intuit all said they don’t expect to back off AI anytime soon.
“We live in a world of uncertainty…[but] we’re very certain of our strategy,” Intuit SVP and Chief Data Officer Ashok Srivastava said. “We’re here to actually make the financial lives of consumers and businesses better through use of AI and data. I don’t think [tariffs are] going to change it. In fact, what I see happening is doubling down on that.”
Papa Johns' annual budgeting process includes a “rigorous” assessment of the return on investment for each project it plans to undertake to advance the business, Chief Technology and Digital Officer Kevin Vasconi said.
“Here’s the one thing I will guarantee you: I can get a bigger return on an AI-based project than I can any other project right now,” Vasconi said.
“So, I don’t see us slowing down our AI spending.... maybe we’re moving some funds from another project source. But the returns we’re seeing now would say ‘put your foot on the gas,'" he said.
Google Cloud is seeing “continued interest and spending” on AI from enterprises, said Matt Renner, company president of global revenue. Companies are putting greater focus on quality, rather than quantity, in their proof-of-concept trials. “Customers are being a lot more mindful on what PoCs they do,” he said.
AI cost concerns
The comments came at a time when enterprises are dealing with uncertainty around how the U.S.’ on-again-off-again tariffs will impact their bottom line.
As Fierce previously noted, the tariffs have the potential to drastically increase costs for underlying infrastructure — chips and servers — that AI runs on.
This uncertainty extends to the new Ironwood TPU that Google announced at its event this week.
President Donald Trump has floated the prospect of levying a broad 25% tariffs on chips, though some semiconductors were initially exempt from the U.S. tariffs,
A Google Cloud spokesperson declined to comment on where Ironwood and its other chips are manufactured. But Moor Insights and Strategy’s Matt Kimball told Fierce he believes they are made by TSMC, meaning they are likely manufactured in Taiwan.
“There is a legitimate concern with what this means from a cost perspective,” Kimball said.
In an interview with Big Technology, Google Cloud CEO Thomas Kurian sought to reassure customers, stating the company is “confident we can work through it” and has “been working on contingency plans for quite a while.”
Though the panelists didn’t delve into the specifics of what chips and infrastructure Walmart is using for AI, SVP of Enterprise Business David Glick acknowledged that the company is wary of costs even as it continues to pursue AI.
“Low prices is our [overarching] strategy,” Glick said. “We’re not going to anything where we’re spending more on tech or AI that would make us raise prices.”
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