Free AI sourcing decision tool
AI Build vs Buy Calculator
Compare the economics of developing an AI capability internally versus buying a SaaS or vendor platform, including implementation, staffing, cloud/model spend, maintenance, vendor fees, risk and multi-year total cost.
Simple sourcing model
Same use caseCompare internal build with a vendor AI platform
Internal build
Buy / SaaS vendor
Risk adjustment
Simple methodBuild Year 1 cost includes engineering time during the build period plus other implementation cost, then annual infrastructure, maintenance, governance and licenses. Buy Year 1 cost includes implementation plus annual subscription, usage, internal oversight and support. Expected risk cost = probability × financial impact. The vendor exit/migration cost is shown separately and included in term TCO as an expected end-of-horizon switching allowance.
Simple cost table
Planning-horizon TCOBuild vs. buy cost components
| Cost component | Build | Buy |
|---|
Advanced sourcing model
5-year NPV-style TCOModel staffing, delay, escalation, risk and discounted TCO
Business value & timing
Internal build team
Vendor / SaaS platform
Risk & customization value
Advanced methodBuild and Buy are modeled as separate annual cash-cost streams. Build includes development labor during the implementation period, maintenance labor, infrastructure and governance. Buy includes vendor implementation, subscription, usage, internal administration and support. Delay cost values the difference in time-to-production using the entered annual economic value. Expected risk costs are probability-weighted planning allowances. Custom-build and vendor advantages are treated as economic value offsets, not cash invoices. Discounted TCO applies the entered discount rate to yearly net economic cost.
Annual cost comparison
Discounted and undiscounted viewsBuild and Buy economics by year
| Year | Build cash cost | Buy cash cost | Build value offsets | Buy value offsets | Build economic cost | Buy economic cost | Cumulative cash difference |
|---|
Vendor-price sensitivity
Vendor recurring spend scaled togetherDecision as vendor subscription + usage pricing changes
| Vendor price scale | Buy cash TCO | Buy discounted economic cost | Build advantage / disadvantage | Lower-cost path |
|---|
Build-team sensitivity
Build and maintenance labor scaled togetherDecision as internal engineering cost changes
| Build labor scale | Build cash TCO | Build discounted economic cost | Build advantage / disadvantage | Lower-cost path |
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Time-to-production sensitivity
Internal build timeline changedValue of implementation speed
| Build time | Build delay cost | Build discounted economic cost | Build advantage / disadvantage | Lower-cost path |
|---|
Scope
Build vs. Buy is more than a license-price decision
This calculator is a financial planning model. It does not determine whether an internal team can safely or reliably build the required capability, whether a vendor meets security or compliance requirements, or whether custom development creates durable strategic advantage. Validate data rights, model access, integration complexity, evaluation quality, security, regulatory requirements, support, vendor lock-in, staffing availability and exit terms before making a sourcing decision.