Global cloud software company Teradata has told its 5,100 employees they will not receive annual salary raises this year as it redirects funds toward AI investments.
Business Insider reports that Teradata has informed its workforce that the company would be reallocating the budget typically reserved for annual salary adjustments to instead invest in AI talent and expertise. This marks the second known instance of a company openly prioritizing AI spending over traditional employee compensation.
In the memo, Teradata CEO Steve McMillan stated that the company’s focus for 2026 is to “win in the market with AI.” To achieve this goal, the organization will be increasing its investment in AI capabilities by redirecting funds from what would have been used for 2026 annual salary adjustments.
A Teradata spokesperson confirmed the company is actively investing in AI to innovate its products and services but did not provide additional comment on the budget decision. Two US-based employees who have worked at the company for over a decade reported that annual salary increases typically ranged from two to four percent, though such raises were not guaranteed every year.
Teradata is not alone in this approach. TTEC, a midsize technology and services firm, recently paused 401(k) matches for its US employees through the end of 2026. The company stated in internal communications that the benefits reduction would help fund the tools, training, and capabilities necessary for its AI transformation.
Both Teradata and TTEC operate in the technology services sector, where the failure to adapt to AI is viewed as an existential threat. Across industries, businesses are ramping up their AI expenditures. A recent survey from RBC Capital that polled 117 IT professionals at companies ranging from under $250 million to over $25 billion in annual revenue found that 90 percent planned to increase AI spending in 2026.
AI spending can vary dramatically, from tens of thousands of dollars for small pilot programs to millions for enterprise-scale transformations. These costs are materializing as many companies already face tighter budgets due to inflation, tariffs, and supply chain disruptions.
Both Teradata and TTEC have experienced financial challenges in recent years, with global revenue declining 5 percent and 3.2 percent, respectively, in their latest financial years.
Breitbart News previously reported that Mark Zuckerberg’s Meta reassigned 7,000 workers to AI projects as it laid off another 8,000, job cuts widely considered to be designed to free up capital for AI expenditures.
Massive AI investments are impacting American companies in ways far beyond layoffs and hiring freezes. Breitbart News social media director Wynton Hall has written his instant bestseller Code Red: The Left, the Right, China, and the Race to Control AI to serve as the definitive guide on how the MAGA movement can create positions on AI that benefit humanity without handing control of our nation to the leftists of Silicon Valley or allowing the Chinese to take over the world.
Read more at Business Insider here.
Lucas Nolan is a reporter for Breitbart News covering issues of AI, free speech, and online censorship.