I suspect AI would have to get drastically more expensive before it starts looking worse than payroll. If one developer using Claude Code can effectively substitute for 2 developers, you are already coming out ahead at current API pricing assuming very heavy usage, your cost is going to be ~1.5x developer (factoring in beyond salary - benefits, PTO, the other overhead that comes with having employees).

So you're getting 2 for the price of 1.5. Scale that up to 500 devs at a big company and it's a big chunk of change saved on payroll.

Keeping your headcount or hiring humans instead, AI would have to start to cost upwards of $15k/month/developer or more before it costs more than hiring. You're looking at about 4 billion tokens per month before humans start to break even or are cheaper.