How To Find The Real Return On AI Coding
AIThis post was created with the assistance of artificial intelligence (AI).

🔍 Read the full analysis: How To Find The Real Return On AI Coding on ThorstenMeyerAI.com

Buying for a business?Offer from Amazon

Get business pricing on office and shipping supplies

  • Business-only prices and quantity discounts
  • Tax-exempt purchasing
  • Multiple users, one account, clear invoices
As an affiliate, we earn on qualifying purchases.

TL;DR

A report based on interviews at 27 workplaces finds AI coding budgets range from about $150 to $3,000 per developer per month, while measured output varies widely. The evidence points to gains in tasks such as issue triage and backlog cleanup, but does not establish a single reliable return across teams; companies need to measure delivery outcomes, rework and costs.

Engineering teams are spending about $150 to $3,000 per developer per month on AI coding tools, but many cannot yet say what that spending has delivered, according to an October 23 report by Thorsten Meyer that reviews data from 27 workplaces. The findings arrive as companies set 2027 budgets and face usage-based pricing, while reported productivity results range from flat output to large increases.

The report draws on interviews and data assembled by Gergely Orosz of The Pragmatic Engineer, who spoke with engineering leaders and senior engineers at 27 workplaces and included aggregate figures from code-review vendors CodeRabbit and Gitar. The freely accessible portion of Orosz’s report is the basis for Meyer’s account. Spending levels did not appear to track company size: a publicly traded company with 1,500 engineers capped individual spending at $150 a month, while a two-person European .NET agency reported spending about $3,000 per developer.

Productivity measures also diverged. CodeRabbit reported that developers on its platform created 113% more pull requests per week than a year earlier. Microsoft’s study of tens of thousands of engineers during an early-2026 rollout found adopters merged about 24% more pull requests than they otherwise would have over four months. Those figures measure different groups and outcomes; neither establishes how much additional customer or business value was delivered. At some interviewed companies, pull-request counts were flat, while one reported that pull requests had become three times larger.

Controlled research offers a more qualified picture. METR’s early-2025 study found experienced open-source developers took 19% longer with AI on the tasks tested. A February follow-up estimated an 18% speedup for returning developers and 4% for new developers, but the confidence intervals included zero. METR said the results were unreliable in part because participants held back some tasks they preferred to do without AI. It also reported that participants in a survey of 349 technical workers estimated a 1.4-to-2-times change in the value of their work, while warning that its 2025 participants had overestimated AI’s effect by 40 percentage points.

At a glance
analysisWhen: Published October 23, 2026; drawing on…
The developmentA new review of engineering budgets and productivity data finds AI coding costs and reported output gains vary sharply, as companies prepare 2027 budgets.
Thorsten Meyer AI
AI coding budgets · Oct 2026

Infographic 01 · Where the money goes

From a $150 cap to $3,000 a month per developer.

Anecdotal data from 27 workplaces, mostly anonymized. It shows how wide the range is, not an industry average.

27workplaces interviewed by The Pragmatic Engineer
$150–3Kmonthly AI budget per developer across the sample
16×quant firm’s total AI spend, January → September
5–10×bill increase some expect when subsidized plans end

Spend per developer per month

Examples from the free part of the article · scale to $4,000

  • Public company, 1,500 engineersmonthly cap per developer$150 cap
  • Quant trading firm, Januaryaverage per developer~$80
  • Quant trading firm, Septemberaverage per developer · total $8M/month$1,600
  • Public company, 5,000 stafftypical backend engineer · $1,000 soft cap~$1,500
  • Same company, team leads / Staff+typical spend~$2,500
  • AI SaaS, ~100 staffallowance, treated as a hard cap$2,000 cap
  • Two-person .NET agency (EU)actual spend per developer~$3,000
  • Multinational, 10K+ staffhard cap · average feels like ~$1,000$4,000 cap

actual or typical spendbudget cap

What changed in 2026

Why the 2027 budget needs a range

  • Peak in June and July: spend has roughly halved since for companies on API plans (Opus 5.5 and open models).
  • Caps are common at medium and high spenders, and most people say they are easy to get around.
  • Subsidies are ending: some companies must optimize or see the bill rise 5–10×.
  • GitHub Copilot bills by token since 1 June 2026, at each model’s API rate, with no fallback to a cheaper model.
  • Company size does not predict spend.

ROI is “a question that few companies seem able to answer – at least for now.”Gergely Orosz, The Pragmatic Engineer, 20 Oct 2026

Sources: The Pragmatic Engineer, “What’s the ROI of software engineers’ spending on AI?” (20 Oct 2026, free part); GitHub (27 Apr 2026).
Powered by Thorsten Meyer AI

Budget Decisions Need Delivery Measures

The immediate issue for companies is not whether AI tools can produce code, but whether the spending translates into accepted, useful changes without shifting costs into review, rework or security. That distinction matters as discounts expire and billing increasingly reflects model usage. The report says some companies expect discounted subscriptions to end soon; without cost controls, their bills could rise five- to tenfold, according to those companies.

Meyer points to cost per accepted change, rework, change-failure rates and the number of stories closed compared with new stories arriving as more useful measures than tokens consumed or code generated. These are suggested measures, not results from a standardized industry study. They help separate faster drafting from successful delivery and make it possible to compare tool costs with the work a team actually completes.

The gap is visible in the examples. One SaaS company saw little change in merged-pull-request velocity, yet a staff engineer described customer-issue triage shrinking from as much as a day to minutes of agent work and up to an hour of checking. A multinational team reportedly closed three times as many user stories per month. The results suggest that productivity gains may depend on the task and the team’s software environment, rather than following automatically from adoption.

Amazon

AI coding tools for developers

As an affiliate, we earn on qualifying purchases.

As an affiliate, we earn on qualifying purchases.

Usage Pricing Meets Uneven Results

The budget question has sharpened as vendors change how they charge. According to Meyer’s account, GitHub moved all Copilot plans to usage-based billing on June 1, charging for tokens at each model’s API rate and removing the fallback to a cheaper model. GitHub said the change reflected higher compute and inference demands from agentic use. Orosz’s reporting also found API-plan spending peaked in June and July and had roughly halved since for some companies, which he attributed to Opus 5.5 and a shift to open models.

The reported use cases with clearer gains include issue triage, code archaeology, prototypes and backlog cleanup, particularly on simple, uniform technology stacks. Ix Technologies, which builds in C# and Blazor, reported shipping about 60 pull requests per developer per week while working through a long-standing backlog. Cofounder Rogier van der Hee said the two-person agency felt it could do the work of five to seven people compared with before AI. That is his account of the agency’s experience, not an independently verified productivity estimate.

Security remains another cost to track. Meyer cites Veracode testing in which 44% of AI coding tasks produced a known vulnerability. The figure is tied to that test and does not show that 44% of AI-generated code in all workplaces is vulnerable. It does underline why output counts alone cannot capture the review and security work needed before software is shipped.

““A question that few companies seem able to answer – at least for now.””

— Gergely Orosz, as quoted in Thorsten Meyer’s report

Amazon

code review automation software

As an affiliate, we earn on qualifying purchases.

As an affiliate, we earn on qualifying purchases.

How Much Output Becomes Value

The available figures do not establish a common, independently verified return across companies. Studies and vendor data cover different users, tasks, time periods and definitions of productivity. A higher pull-request count may reflect more valuable work, larger changes, or additional review burden; the source material does not provide a consistent way to distinguish these outcomes across the 27 workplaces.

METR’s estimates also carry substantial uncertainty, and its researchers flagged limitations in how participants selected tasks. The Veracode result is specific to its test, while company anecdotes cannot show how typical those gains are. It is also unclear how often reported savings in drafting time persist after review, maintenance and security checks. Meyer’s report does not supply a standardized cost-benefit analysis or a complete dataset covering all participating workplaces.

Amazon

AI-powered developer productivity tools

As an affiliate, we earn on qualifying purchases.

As an affiliate, we earn on qualifying purchases.

Companies Set Their 2027 Baselines

Companies setting 2027 budgets will need to decide whether to renew discounted subscriptions, impose spending caps or shift workloads among models. The report says caps are common and can be bypassed, making policy alone an incomplete way to control costs. Teams will need to compare spending with delivery measures over a defined period and account for review, rework and failures alongside output.

The next useful evidence would show results on comparable tasks and include both costs and quality: accepted changes, time to delivery, rework, security findings and the rate at which teams close work relative to incoming demand. Until companies publish or collect that information consistently, the return on AI coding will remain a local measurement question rather than a settled industry figure.

Amazon

software development analytics tools

As an affiliate, we earn on qualifying purchases.

As an affiliate, we earn on qualifying purchases.

Key Questions

How much are companies spending on AI coding tools?

The workplaces described in the report ranged from a $150 monthly cap per developer to about $3,000 per developer per month. These are examples from the reported sample, not an industry-wide average.

Does the report show that AI coding increases productivity?

Some measures show increases, including Microsoft’s reported 24% rise in merged pull requests among adopters over four months. Other companies reported flat pull-request counts, and METR’s research estimates were uncertain. More output does not by itself establish more business value.

Where does AI coding appear most useful?

The cases in the report point to triage, code archaeology, prototyping and backlog work, especially in simpler, more uniform software environments. These are reported experiences, not proof that the same gains will apply to every team.

What should engineering teams measure?

Meyer recommends tracking cost per accepted change, rework, change-failure rates and stories closed compared with stories coming in. Teams should also account for review and security work rather than treating generated code or token use as the return.

What remains unknown about AI coding’s return?

There is no consistent, cross-company measure showing how much reported output turns into delivered value after review, maintenance and security checks. The cited studies use different methods, and several findings carry significant limitations.

Source: ThorstenMeyerAI.com

This content is for general information only and is not financial, tax or legal advice. Consult a qualified professional for decisions about your money.
HALLOWEEN

Halloween Picks

As an affiliate, we earn on qualifying purchases.

You May Also Like

Series H Funding Signals Anthropic’s Commitment to Compute Power

Anthropic’s $65B raise isn’t just about money — it signals a shift to infrastructure-heavy AI. Discover how compute and supply chains now drive valuations.

Forezai · Polybot: When the AI Disagrees With the Odds

Polybot, an AI trading experiment, tests when and if an AI can reliably disagree with prediction market prices, highlighting risks and insights.

Mistral Forge: Owning the Model, Not Just Renting the API

Mistral’s Forge offers organizations the ability to build and own their AI models, moving beyond API rental to full control. This approach suits specialized, data-sensitive companies.

Apple’s SpeechAnalyzer API: Enhancing Technology Signal Monitoring Capabilities

Apple’s new SpeechAnalyzer API offers enhanced speech processing capabilities, benchmarked against Whisper, for technology signal monitoring in small software firms.