Free tool
Build vs buy AI cost calculator
Estimate the cost of building and maintaining an internal solution against a vendor quote.
Compare options that cover the same work, integrations, and controls.
Example inputs. Replace with your own. Vendor fees are not REAL pricing.
Read the build vs buy guideBuying is estimated to cost $471,988 less over 36 months.
Annual staff cost used: $176,774 per full-time equivalent.
Build
1 FTE is one person working full time on this project. Use 0.5 for half of someone’s time.
Additional costs included: $100,000 upfront and $135,000/year.
Buy
Use your vendor quote and expected production timeline.
Internal effort included: $118,387/year.
Adjust supporting costs
Estimated cost over 36 months
- Build
- $1,607,418
- Buy
- $1,135,430
Buying is estimated to cost $471,988 less over 36 months.
Based on your inputs. Costs include allocated staff time.
Include the financial impact of a later launch
Add the estimated incremental impact of delaying production. Do not enter the full value of cash that will simply arrive later.
How costs add up over time
Estimated cost accumulation using the timing assumptions below.
- Build
- Buy
Build team payroll is spread evenly across the months until production. Other one-time build costs, implementation and any one-time vendor fees are placed at month 0. Actual payment timing may differ.
View chart data as a table
| Month | Build | Buy | Build − buy |
|---|---|---|---|
| 0 | $100,000 | $50,000 | $50,000 |
| 1 | $144,194 | $70,833 | $73,360 |
| 2 | $188,387 | $91,667 | $96,720 |
| 3 | $232,581 | $122,366 | $110,215 |
| 4 | $276,774 | $153,064 | $123,710 |
| 5 | $320,968 | $183,763 | $137,204 |
| 6 | $365,161 | $214,462 | $150,699 |
| 7 | $409,355 | $245,161 | $164,193 |
| 8 | $453,548 | $275,860 | $177,688 |
| 9 | $497,742 | $306,559 | $191,182 |
| 10 | $541,935 | $337,258 | $204,677 |
| 11 | $586,129 | $367,957 | $218,172 |
| 12 | $630,322 | $398,656 | $231,666 |
| 13 | $671,034 | $429,355 | $241,680 |
| 14 | $711,747 | $460,054 | $251,693 |
| 15 | $752,459 | $490,753 | $261,706 |
| 16 | $793,171 | $521,452 | $271,720 |
| 17 | $833,884 | $552,150 | $281,733 |
| 18 | $874,596 | $582,849 | $291,747 |
| 19 | $915,308 | $613,548 | $301,760 |
| 20 | $956,021 | $644,247 | $311,774 |
| 21 | $996,733 | $674,946 | $321,787 |
| 22 | $1,037,445 | $705,645 | $331,800 |
| 23 | $1,078,158 | $736,344 | $341,814 |
| 24 | $1,118,870 | $767,043 | $351,827 |
| 25 | $1,159,582 | $797,742 | $361,841 |
| 26 | $1,200,295 | $828,441 | $371,854 |
| 27 | $1,241,007 | $859,140 | $381,867 |
| 28 | $1,281,719 | $889,839 | $391,881 |
| 29 | $1,322,432 | $920,537 | $401,894 |
| 30 | $1,363,144 | $951,236 | $411,908 |
| 31 | $1,403,856 | $981,935 | $421,921 |
| 32 | $1,444,569 | $1,012,634 | $431,934 |
| 33 | $1,485,281 | $1,043,333 | $441,948 |
| 34 | $1,525,993 | $1,074,032 | $451,961 |
| 35 | $1,566,706 | $1,104,731 | $461,975 |
| 36 | $1,607,418 | $1,135,430 | $471,988 |
View cost breakdown
| Cost category | Build | Buy |
|---|---|---|
| One-time costs | ||
| Build team payroll until production | $530,322 | — |
| Other one-time build costs | $100,000 | — |
| One-time implementation | — | $50,000 |
| Recurring costs over the selected period | ||
| Operating cost after build launch | $977,096 | — |
| Vendor subscription, 36 months from signing | — | $750,000 |
| Internal effort after vendor launch | — | $335,430 |
| Total over 36 months | $1,607,418 | $1,135,430 |
How this is calculated
Build
Buy
B is the people allocated to the build × annual staff cost × months until production ÷ 12, plus other one-time build costs. R is the people allocated after launch × annual staff cost, plus model usage and infrastructure, plus additional review hours × reviewer hourly cost. E is the internal owner and approvers × annual staff cost, plus additional review hours × reviewer hourly cost. Annual staff cost is base wage × loaded-cost multiplier.
I is implementation and F is any one-time vendor fees not in the quote. A is the subscription plus any annual fees not in the quote, billed from signing, with any annual price increase applied from year 2. H is the comparison period and M is months until production for each option. w is 1 only when you include the impact of a later launch (V per month), otherwise 0.
- All months are counted from the decision date. Both options use the same comparison period.
- Build operating costs start at build launch. Vendor internal effort starts at vendor launch.
- If production falls after the end of the period, operating time is counted as zero and build payroll stops at the end of the period.
- Build team payroll is spread evenly across the months until production. Other one-time build costs, implementation and any one-time vendor fees are placed at month 0. Actual payment timing may differ.
- No hidden complexity multipliers or maintenance percentages are added. Every amount comes from an input on this page.
For a line-by-line checklist of what to price into each input, see the build vs buy handbook.
Assumptions used
| Comparison period | 36 months |
|---|---|
| Build: people allocated to the build | 3 FTEs |
| Build: months until production | 12 months |
| Build: people allocated after launch | 2 FTEs |
| Buy: one-time implementation cost | $50,000 |
| Buy: annual vendor subscription | $250,000 |
| Buy: months until production | 2 months |
| Base annual wage per FTE | $135,980 |
| Loaded-cost multiplier | 1.3 × |
| Reviewer hourly cost | $75 |
| Build: other one-time costs | $100,000 |
| Build: model usage and infrastructure | $60,000 |
| Build: additional review and re-testing hours | 1,000 hours / year |
| Buy: internal owner and approvers | 0.5 FTEs |
| Buy: additional review hours | 400 hours / year |
| Buy: one-time fees not in the quote | $0 |
| Buy: annual fees not in the quote | $0 |
| Buy: annual price increase | 0 % / year |
| Impact of a later launch | Not included |