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AI budgets are hot, IT budgets are not
- Many enterprises are still unsure about the benefits of AI investments versus historical IT initiatives like ERP, data warehousing, and cloud computing.
- ETR's data shows a shift towards building in-house AI applications, with 83% of IT decision makers planning to increase spend on AI app/dev in 2025.
- There is a consensus across different buyer types on expanding budgets for custom AI workloads to accelerate time-to-value.
- Enterprises are still in proof-of-concept or early production stages indicating a multi-year investment wave in AI application development.
- Geopolitical tension and shifting policy frameworks are not derailing enterprise AI agendas, with more firms proceeding cautiously than slowing down adoption.
- ROI for AI projects lags with 27% of respondents yet to see tangible returns, indicating enterprises are still in experimentation mode rather than harvesting immediate benefits.
- C-suite executives rank AI initiatives as the second-most vulnerable category to cuts, next to outsourced IT services, highlighting the potential vulnerability of experimental AI funding.
- AI budget growth expectations have retreated, indicating a cautious sentiment towards IT spending due to economic uncertainties and geopolitical unrest.
- Policy uncertainty is causing executives to tap the brakes on net-new IT projects, with 71% acknowledging some form of pullback due to uncertainty.
- Enterprise adoption of specific AI foundation models shows OpenAI's GPT leading in mindshare, with Microsoft's Azure OpenAI Service being widely adopted.
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