AI in customer service: Not the cost-saver you think

The fear that AI will replace human jobs is a major concern for many employees worldwide. One reason often given for job displacement via AI is the perception that use of artificial intelligence to perform a role will be more cost-effective. This assumption is having an impact on various industries, as large US tech companies in particular cut large numbers of jobs, citing the advancements of AI and automation.

But a recent report from Gartner challenges this assumption. At least in the area of ​​customer service, Gartner analysts predict that the cost of generative AI per problem solution will exceed $3 by 2030. This calculation includes all costs incurred in answering a customer inquiry, for example. According to Gartner, this would make use of gen AI more expensive than the cost of many call center employees in offshore locations.

AI costs are exploding

Gartner analysts cite the following as the reason why AI costs for customer service organizations will explode:

• Rising data center costs
• Current AI ​​provider subsidization of workloads thus far eventually giving way to the profit motive
• Increasingly complex use cases that consume more resources and require highly qualified specialists

“Customer service leaders are determined to use AI to reduce costs, but return on those investments is far from guaranteed,” Patrick Quinlan, Gartner senior director analyst, explained in a release about the findings.

“Full automation will be prohibitively expensive for most organizations; instead, leading organizations will use AI to drive customer engagement rather than to cut costs,” he predicts.

Improved customer experience with AI

Even without considering the unfavorable cost ratio, Gartner experts believe that customer service will not be able to function without human interaction in the long term. Quite the contrary: They predict that regulatory changes related to AI will increase the volume of supported services by 30% by 2028. This would lead many customers to exercise their right to a human contact person and opt against an AI agent.

As a result, Quinlan estimates that companies may even be forced to “rehire human agents, possibly at higher numbers or at a higher salary than they previously paid. Failure to maintain appropriate staffing levels could lead to deterioration of the customer experience, with customers waiting for long periods to speak to a human.”

Given the rising costs of gen AI, Gartner anticipates a strategic shift in the coming years: Most companies will abandon their efforts to reduce costs through automation and pursue other goals instead. For those who use AI not only to solve problems but also to create value along the entire customer journey, this presents a clear differentiation opportunity, according to the firm.

“Customer service leaders will turn to AI to improve the customer experience,” according to Quinlan. “They’ll look beyond cost optimization to other benefits, such as increasing customer lifetime value, repurchase rate and brand loyalty.”

Since customers will expect proactive and personalized service, pioneers here have gained a clear competitive advantage.

AI in the customer sector has room for improvement

Gartner acknowledges, however, that it will be some time before AI can sustainably improve the customer experience in customer service. According to Emily Potosky, senior director of research for customer service and support at Gartner, the technology is not yet mature enough. It cannot fully replace the expertise, empathy, and judgment of human employees.

“Relying solely on AI now is premature and could lead to unintended consequences,” the analyst said. One such consequence is that half of all companies that laid off employees to replace them with AI will increase their hiring of people again by 2027.

A Gartner survey from October 2025 reinforces this prediction: Of the 321 customer service and support executives surveyed, only 20% had actually reduced staff due to AI. The majority, however, stated that their headcount remained stable because they were now serving more customers.