Due to sanctions in Russia, the cost of developing systems based on artificial intelligence has increased

The cost of developing software and IT systems based on artificial intelligence (AI) has increased by 30-40% in Russia over the year, and by the end of 2023 it may increase by another 50%, developers of such systems claim. The main reasons they call the rise in price of foreign equipment, in particular, Nvidia graphics processors, as well as a shortage of personnel. Market participants fear that in the absence of state support for AI projects in the regions, customers will begin to reduce investment in this area or switch to less secure solutions, for example, from Chinese vendors.

NtechLab (a developer of face recognition systems) told Kommersant that over the past year (from June 2022 to June 2023), due to the rise in the cost of computing equipment and the increase in salaries for specialists in the field of artificial intelligence, the cost of developing software based on AI in the Russian Federation increased by 30–40%. The situation, according to the company, was affected by sanctions from the EU and the US, prohibiting the import of electronics to Russia, as well as an increased shortage of personnel.

Worldwide, the cost of developing AI-based software has remained at the same level, specify NtechLab: “China faced similar problems, which was limited in the supply of Nvidia video cards. But Asian companies have their own production of video cards, so the cost of technology has grown less – by 10-15%.

According to Ruslan Permyakov, Deputy Director of the NTI Competence Center Trusted Interaction Technologies, the cost of finished AI-based software is now about 10% higher than in the summer of 2022: exists”.

Problems with personnel in the field of artificial intelligence in the industry began in the spring of 2022, when a mass departure of specialists from Russia began. Then, according to HeadHunter, there were no more than two applicants for one vacancy in this area (see Kommersant dated April 11, 2022).

Over the past eight months, competition for AI specialists has intensified, many have received offers from international companies in foreign currency, so wages have to be increased to retain them, says MTS AI COO Renat Gabdullin. According to him, the cost of AI-based software has increased by about 25%. The price is influenced by the growing costs of specialists, the high cost of the latest models of video cards and processors due to sanctions restrictions and, as a result, the rise in the cost of cloud capacity, adds Dmitry Markov, CEO of VisionLabs.

For the development of AI, Nvidia equipment is used, these are GPU graphic processors, Vladimir Lebedev, head of the development group of the Reksoft Mining Solutions Department, clarifies: “We can say that the manufacturer is a monopolist, since most of the software is developed for their technology. Other market players – AMD and Intel – also release GPUs, but their presence in the AI ​​hardware market is significantly smaller. GPU processors are used for training neural networks, machine learning, big data analysis, in the field of cryptocurrency and mining, for virtualization and cloud computing, 3D graphics, animation, etc., he specified.

Director of the Artezio development center (Lanit group) Dmitry Parshin believes that the rise in price of AI-based software will continue due to sanctions pressure and by the end of 2023 its cost may increase by another 50%: “This may lead to a reduction in investment in AI and moving to cheaper and less efficient or safer solutions.”

Government support is needed to develop the domestic market of Russia through more active implementation of AI projects in the regions, an NtechLab representative believes: technologies at the state level.

Timofey Kornev