UPDATED ON : 21-01-2025
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TL; DR
AI app development costs typically range between $60,000 and $150,000, influenced by app complexity, data needs, and integration requirements.
Leveraging pre-built APIs and cloud services can significantly reduce the cost to build AI apps and development time.
Post-development costs like maintenance and updates are ongoing expenses to ensure app performance.
Popular AI apps, such as Grammarly or Drift, offer inspiration for building cost-effective and impactful solutions.
Planning phased development and focusing on ROI is essential to optimize resource allocation.
At Biz4Group, we’ve been building AI apps for a while now. From SaaS-based AI chatbots to exclusive AI features into existing software, we’ve developed solutions that made a difference. And that’s what inspired us to put some light on the AI app development cost; because most of our clients asked us this.
So, let’s dive deep in...
Speaking statistically, the AI market size is going to reach $1.84 trillion by 2030, with a CAGR of 32.9%. This directly shows the scale of financial investment made at present and is going to be in the near future. Therefore, as an entrepreneur or investor, it is imperative for you to learn how much does it costs to develop an AI app for your business.
Statista
In this blog, we are going to learn the factors responsible for deciding cost to build an AI, how one can optimize the heavy cost related to the AI app development.
Being an AI development company deal with AI app development, provide consultation in AI app development, generative AI development, on demand app development services, and most importantly post-deployment support services. So, here is the approximate cost we estimate.
On average, to develop an AI app it costs between $60,000 - $150,000. However, we at Biz4Group have kept the cost feasible enough, depending on the app type. For more information, keep reading on the essential details.
There are many reasons why you need to consider an AI app cost while developing them:
First, you can prepare the development budget accordingly and reasonably.
Secondly, you can plan phases of development to keep the focus on ROI and value propositions.
Besides, merely 53% of projects make it from artificial intelligence (AI) prototypes to production. However, there are diverse reasons for the failure of AI app projects. But the most important seems to be the failure to develop and AI app in phases. The following should be the phases:
1. Wireframing
2. Prototyping
3. Creating an MVP (Minimum Viable Product)
4. Validating the AI app idea via UAT of MVP
5. Creating an MMP (Minimum Marketable Product)
6. Lastly, keep on adding more important features
Also Read: Step-by-Step Guide: How to Integrate Chatbot in Website?
Let’s delve into the details of the factors that influence the cost of an AI app development:
The scope and complexity of features and other requirements has a direct impact on the development cost of the AI app. AI applications with basic functionalities like chatbots are less expensive. However, apps that require image recognition and advanced automation.
Apps that possess complex features like advanced machine learning algorithms, like NLP, it is obvious for them to become costlier. Additionally, complex apps also require lager AI capabilities, sophisticated development, customized AI models, diligent testing, etc.
For your reference an AI travel planner costs between $20,000 and $80,000. While apps with advanced features, such as image recognition and sentiment analysis can range from $50,000 to $200,000.
Team’s size and its expertise impact project’s budget. Less experienced teams can cost less but often lead to project failures due to their limited exposure to top AI platforms. It can also lead to long-term expenses due to a higher probability of rework, along with extended testing phases.
On the other hand, highly skilled professionals would settle for higher salaries, provided that they increase project development efficiency, with less errors, when it comes to developing AI apps.
So, basically you got the point. AI technology is new and given the AI project failure rate we’ve discussed earlier, working with experienced AI developers would be a better choice.
Development of accurate models and predictions requires high-quality and structured data. Therefore, data is the fundamental thing for AI app development. Well-structured data is essential to train AI algorithms, refine performance, along with ensuring reliability.
Now, when it comes to AI app cost related to data, data itself goes through multiple phases and each phase has its cost. Here are the phases for your reference:
1. Gathering raw data from various sources - $5,000 to $20,000
2. Removing inaccuracies and formatting data for AI models - $10,000 to $30,000
3. Adding labels to data for supervised learning - $15,000 to $50,000
4. Ensuring secure and scalable storage of large datasets - $5,000 to $20,000 annually
5. Ensuring regular updates to keep data relevant - $10,000 to $40,000 annually
6. Adhering to legal and ethical guidelines - $5,000 to $15,000
AI app Development costs include using programming languages (Python, R), libraries (Pandas, TensorFlow), cloud platforms (AWS, Google Cloud), and DevOps tools. Building AI solutions using these technologies adds to the cost. It typically ranges from $10,000 to $50,000 depending on the tools and technologies required.
Additionally, costs also arise from using databases and employing DevOps tools for efficient development and deployment.
When it comes to compatibility between the AI app and current infrastructure, it requires huge customizations. The process of integration involves rigorous testing, API development, creating secure interfaces for smooth data exchange.
For instance, if you’re developing AI-powered resume parsing features for your existing HRMS solution; with a goal to automate recruitment process using AI, the development team will have to deal with your existing technology infrastructure. This complexity will add on to your overall cost of deployment, keeping it between $20,000 to $100,000.
Monitoring and analytics too hold the cost of its own. This comes in terms of tracking app performance, user engagement, and other key metrics. The strategic goal with monitoring and support is to identify technical issues, optimize functionality, and more. Besides, post-development costs are unavoidable expense to sustain the app’s performance. It’s like maintaining your lawn. To give you an idea, these costs can range from $5,000 to $20,000 annually.
Also Read: Most Innovative AI Case Studies of 2024 – Success Stories
The following breakdown will help you understand how much does AI cost:
| App Type | Cost | Features | Example |
|---|---|---|---|
| AI Chatbots | $20,000 - $80,000 | NLP, sentiment analysis, and real-time responses | Virtual AI customer service agents |
| Resume Parsing Software | $40,000 - $120,000 | Automated candidate screening, keyword matching, and data extraction | AI-powered applicant tracking systems for recruitment |
| Predictive Analytics Tools | $30,000 - $100,000 | Data analysis, forecasting, and pattern detection | Sales forecasting for retail |
| Healthcare AI Apps | $80,000 - $200,000 | Diagnostics, patient monitoring, and personalized medicine | AI-powered radiology tools |
| AI-Powered CRM | $70,000 - $150,000 | Lead scoring, customer insights, and personalized communication | CRM tools with integrated AI recommendations |
When considering the cost to build an AI app, it’s essential to account for several hidden factors that can significantly influence the overall budget. These factors go beyond the basic development and can often be overlooked by businesses during the planning phase.
1. Data Privacy and Security: Apps that require HIPAA compliance and advance encryption would require AI platforms like IBM Watson for healthcare, adding significant cost.
2. Licensing Fees: OpenAI’s GPT, Google’s Vision AI — these tools often come with licenses that increase the price depending on their usage tiers.
3. Scalability Needs: The way Netflix’s AI driven recommendation system scales for millions of users requires significant investments in a robust infrastructure.
4. Iteration and Refinement: Refining AI applications based on user feedback is hands on learning, and that requires continued updates and improvements to the app.
5. Training Time: Training OpenAI’s GPT-4 required massive computational resources, emphasizing the cost of training such models for high performance.
When evaluating the cost to develop an AI app, it's useful to look at the development costs of well-known AI business applications. These popular AI applications serve as benchmarks and provide insight into the factors influencing pricing.
1. Virtual AI Customer Agents like Drift - $50,000 to $100,000
2. Resume Parsing Software like Zoho Recruit - $40,000 to $120,000
3. AI-powered Writing Assistant like Textio - $50,000 to $110,000
4. Sales Analytics and Insights like Gong.io - $60,000 to $130,000
5. AI-powered Grammar Checker like Grammarly - $80,000 to $200,000
6. AI Budgeting and Financial Assistant like Cleo - $70,000 to $150,000
7. AI CRM Software like InsightSquared - $70,000 to $150,000
8. Predictive Analytics Tools like Looker - $30,000 to $100,000
9. AI-powered Inventory Management like TradeGecko - $60,000 to $140,000
10. AI-powered Customer Support like Freshdesk - $40,000 to $90,000
Now, the point is, as a businessperson how you can optimize AI app development cost for your business. Here are some insights on how you can optimize the cost of AI app development:
You can simply leverage pre-built AI models and API solutions. This eliminates the need for bearing cost for developing AI models from scratch.
Additionally, pre-built models are created and refined by industry experts, which enhances the probability of high accuracy and reliability.
For example, an AI chatbot development company use OpenAI's GPT API or Google's Dialogflow API instead of building an AI model from scratch. This way, you can easily integrate natural language processing capabilities, high accuracy, and reliability, while saving time and resources on development and training.
In agile development methodology, projects are divided into small units – named “sprints”. Each sprint is meant to deliver a specific set of features. Sprints also lead to early detection of issues.
Moreover, iterative testing is an integral part of agile methodology. Such testing ensures a continuous feedback loop, wherein errors can be identified and rectified on time. Thus, this methodology leads to less costly rework, when it comes to developing AI apps.
Most importantly, an iterative development approach can support your phase-wise development process.
Leveraging cloud services for AI development leads to reducing huge upfront costs of purchasing and maintaining physical hardware. Cloud services fall under pay-as-you-go model wherein fluctuating workload can be managed on and off. Additionally, cloud services also provide access to advanced AI tools so that there is less dependency on in-house expertise.
Further costs can be reduced as cloud providers also handle infrastructure maintenance, security, and updates.
However, some of our enterprise clients wanted on-premises data hosting due to data security. This means apps that handle sensitive data (i.e. patient health data) might require on-premises or private hosting on the cloud.
Biz4Group is recognized as Trusted Advisors, wherein the skilled team of professionals ensure that the projects are handled efficiently. Our comprehensive AI consulting service allows our clients to focus on the other areas of their business because we act as a trusted advisor for AI software development.
Besides, we also offer robust post-development support to ensure that AI applications remain up-to-date and functional.
If you want to know the average cost to develop your AI app, you should contact our AI experts.
The development cost for an app with AI features typically ranges from $60,000 to $150,000.
AI development costs range from $20,000 for simple AI models to $200,000+ for advanced AI systems.
For general web or mobile app development that doesn’t use AI, costs can range from $30,000 for basic apps to $100,000+ for enterprise-grade AI solutions.
Key factors that influence AI app development cost include app complexity, data processing needs, development team expertise, integration requirements, and ongoing maintenance.
Maintenance typically costs 15-20% of the initial development cost annually. It covers updates, performance monitoring, and issue resolution.
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