How Much Does Custom Software Development Cost in 2026? After AI

Key Takeaways

• AI reduced development costs by 10-20% on average, not the 50-70% many people predicted.
• Simple projects see the biggest savings at 20-30% cost reduction with AI tools.
• Complex enterprise systems only save 10-15% because they need human expertise.
• AI tool subscriptions cost development teams $500-$2,000 monthly, offsetting some savings.
• Simple applications now cost $15,000-$50,000 to build in 2026.
• Medium-complexity projects range from $50,000-$200,000 in development costs.
• Complex enterprise systems cost $200,000-$1,000,000 or more to develop.
• Extra code review and quality assurance add $5,000-$20,000 to most projects.
• Annual maintenance costs run 15-25% of your original development investment.
• Developer training on AI tools adds $3,000-$10,000 in early project costs.
• Building an MVP first and adding features later saves 20-30% on total costs.

AI was supposed to make software development dirt cheap. That's what everyone said.

The reality? AI changed costs, but not the way most people expected.

Let me show you what custom software actually costs in 2026 and where your money goes.

What AI Actually Changed

When AI coding tools arrived, people predicted costs would drop 70% or more. That didn't happen.

What got cheaper:

• Writing basic code (40-50% faster)
• Finding and fixing bugs (30% faster)
• Creating documentation (60% faster)
• Testing code (35% faster)

What stayed expensive:

• Understanding what you need
• Designing system architecture
• Solving complex problems
• Connecting different systems
• Managing the project
• Security implementation

The actual cost decrease was 10–20% on average, not the 50–70% that many had anticipated.

Why? Because AI is good at regular coding but has trouble with strategy, design, and intricate business logic. Human specialists are still required for the costly aspects of development.

Additionally, developer teams now have to pay $500 to $2,000 a month for AI tool subscriptions, and AI-generated code requires closer examination. Some savings are negated by these expenses.

2026 Cost Breakdown

Here are real numbers based on current projects.

Simple Applications: $15,000 - $50,000

Examples: Basic mobile apps, simple web tools, internal dashboards

Timeline: 2-4 months
Team size: 1-2 developers

What you get: Standard features, basic integrations, single platform (web or mobile)

AI impact: Biggest savings here (20-30% cheaper than 2023)

Real example: A booking app for a small business cost $28,000 and took 10 weeks. Before AI, it would have been $38,000 and 14 weeks.

Medium Projects: $50,000 - $200,000

Examples: Custom CRM systems, e-commerce platforms, customer portals, workflow automation

Timeline: 4-8 months
Team size: 3-5 developers

What you get: Custom integrations, advanced features, both web and mobile versions, user permissions

AI impact: Moderate savings (15-20% cheaper)

Real example: A real estate CRM cost $95,000 over 5 months. It included property management, client tracking, and accounting integration. Pre-AI cost: $115,000.

Complex Systems: $200,000 - $1,000,000+

Examples: Enterprise platforms, healthcare systems, financial software, multi-company platforms

Timeline: 8-18+ months
Team size: 6-15 developers

What you get: Sophisticated architecture, multiple integrations, bank-level security, handles thousands of users, regulatory compliance

AI impact: Minimal savings (10-15% cheaper)

Real example: A healthcare patient portal cost $380,000 over 11 months with HIPAA compliance. Pre-AI cost: $430,000.

Quick Reference

What Affects Your Cost

Developer Location

Lower rates do not always mean lower total costs. Communication issues and time zones can add expenses.

Technology Stack

Cheaper options (good AI support):

• React, Node.js, Python
• Modern cloud platforms
• Popular frameworks

More expensive:

• Legacy system connections
• Specialized industries (healthcare, finance)
• Custom algorithms
• Unique features

Feature Complexity

Standard features (AI helps a lot): User login, data tables, search, basic reporting
Cost reduction: 30-40%

Custom business logic (AI helps some): Your unique processes, special calculations
Cost reduction: 10-15%

Innovative features (AI barely helps): Never-built-before features, complex algorithms
Cost reduction: 5-10%

Hidden Costs Most People Miss

AI Tool Subscriptions

Development teams pay for:

• GitHub Copilot: $10-$39/month per person
• ChatGPT Teams: $25-$30/month per person
• Other AI tools: $50-$200/month

Total: $500-$2,000 monthly for a small team. Over 6 months, that is $3,000-$12,000 extra.

Extra Quality Checking

AI code needs careful review. This adds:

• 20-30% more testing time
• Security audits
• Finding and fixing AI mistakes

Cost impact: $5,000-$20,000 for medium projects.

Training Time

Developers need time learning AI tools effectively.

Often overlooked: $3,000-$10,000 in slower early work.

Annual Maintenance

Budget 15-25% of your initial cost each year for:

• Updates and security patches
• Bug fixes
• New features
• Performance improvements

If you spent $100,000 building software, expect $15,000-$25,000 yearly maintenance.

Industry research from Gartner confirms these maintenance percentages are standard across enterprise software.

When AI Saves Money (and When It Does Not)

Maximum AI Savings

Minimal AI Savings

The pattern: AI excels at routine coding but struggles with strategy and complex problem-solving.

How to Reduce Costs

Smart Strategies

Build in phases

Start with essential features only. Add more based on user feedback.
Savings: 20-30%

Use modern technology
Pick popular frameworks with good AI support.
Savings: 10-15%

Let AI handle routine work
Documentation, basic testing, standard features.
Savings: 10-20%

Choose the right team structure
Hybrid teams (AI plus human developers) work efficiently.
Savings: 15-25%

Do Not Cut These Corners

Architecture planning: Costs $5,000-$20,000 but saves $50,000+ in future rebuilding.

Security: Costs $10,000-$50,000 but prevents $100,000+ in breach damages.

User experience design: Costs $5,000-$30,000 but ensures people actually use your software.

Thorough testing: Costs $10,000-$40,000 but prevents expensive bugs reaching users.

Pricing Models

Fixed Price

How it works: Agree on features and total cost upfront.

Best for: Well-defined projects under $100,000

Your risk: Low (you know the total)

Hourly Billing

How it works: Pay $40-$200 per hour for actual work.

Best for: Projects where requirements might change

Your risk: Medium (total cost can grow)

Dedicated Team

How it works: Hire a team for $8,000-$40,000 per developer monthly.

Best for: Long-term projects over $200,000

Your risk: Medium (monthly commitments)

Getting Accurate Quotes

What to provide:

• Detailed feature list
• Who will use it
• What systems it connects to
• Timeline needs
• Budget range

Red flags to watch for:

• Prices far below others
• Vague timelines
• No mention of AI tools
• No maintenance plans
• Promises too good to be true

Questions to ask:

• What AI tools do you use?
• How do you check AI code quality?
• What is included in your price?
• How much is annual maintenance?
• Can I see similar projects?

Conclusion

Custom software costs less in 2026 than before AI, but the savings are modest.

AI tools help developers work 10-20% faster on average. Simple projects see bigger savings (20-30%), while complex systems benefit less (10-15%).

Budget these amounts:

Simple app: $15,000-$50,000 (2-4 months)
Medium project: $50,000-$200,000 (4-8 months)
Complex system: $200,000-$1,000,000+ (8-18 months)

Add 15-20% buffer for unexpected issues and plan for 15-25% annual maintenance.

Get quotes from multiple companies that use AI tools. Ask how they work, what is included, and what maintenance costs. The cheapest option is rarely the best value.

AI made custom software more affordable, but quality work still needs skilled developers. Choose your partner carefully and plan realistically.

Ready to Build AI-Powered Software That Scales Your Business?

At Vasundhara Infotech, we turn your ideas into intelligent software solutions. Our team uses cutting-edge AI tools to build custom applications faster and more efficiently—without compromising quality.

Why choose Vasundhara:

• Transparent pricing, no hidden costs
• AI-enhanced development for faster delivery
• Expert team across all technologies
• Post-launch support included

Get a free consultation and accurate cost estimate for your project.