A survey of 224 senior-level IT leaders in the U.S. and Europe, that work for organizations with at least 1,000 employees and at least $100 million in annual revenue, published this week finds the percentage of IT budgets allocated to generative artificial intelligence (AI) projects will triple by 2025.
Conducted by the research firm ISG on behalf of Glean, a provider of an enterprise search platform infused with AI, the survey finds generative AI projects consumed an average of 1.5% of IT budgets in 2023, and are expected to rise to 2.7% in 2024, and 4.3% in 2025. Among organizations with more than $5 billion in revenue, more than a quarter (26%) said they plan to invest more than 10% of their IT budget in generative AI in 2025.
However, more than half of respondents (52%) said generative AI initiatives will also pull budgets away from other IT projects, but an equal percentage disagreed with the notion that generative AI is a distraction from more important IT activities.
Only 8% of leaders surveyed said that their biggest concern about implementing generative AI was that the capabilities were changing too fast for them to be able to invest yet. Instead, their biggest concern is around a lack of expertise in generative AI in their organization.
There will, of course, be significant additional spending on generative AI initiatives by various lines of business within organizations but the survey makes it clear IT leaders are going to be at the forefront of many generative AI initiatives. In fact, the survey finds nearly three-quarters of respondents (73%) said generative AI tools not vetted by IT departments are a threat to the business. Well over half (57%) acknowledged employees are using generative AI tools that have not been vetted. More than half (51%) said it may be better to slow down adoption rather than risk negative consequences.
Overall, nearly half of respondents (47%) of survey respondents said they believe they’re ahead of their competitors in their organization’s use of generative AI. Of those, 16% strongly believe that they’re ahead. A total of 22% said they are not ahead of rival organizations.
Well over a quarter (28%) also said they are already generating positive returns on investment (ROI) from generative AI initiatives. Another 31% said they believe they’re generating positive ROI, but don’t have hard data to support that claim. Only 17% said they are not generating positive ROI yet, but they expect they will in the next year. A total of 6% said they don’t expect to generate positive ROI in the next year, while 17% said it’s too early to tell. Employee productivity was cited as the number one metric (57%) being used to evaluate ROI and 78% said generative AI will be critical for productivity.
The survey also indicates that generative AI is rapidly becoming table stakes for organizations to remain competitive, says Glean CEO Arvind Jain. “Organizations need to invest now,” he says.
The challenge, as always, isn’t so much mastering the technology but rather identifying where to apply AI in a way that has the most meaningful impact for the business.
