Omdia: 2023 AI budgets skyrocket past $1 million

LONDON, 18 April, 2023 – AI has quickly become a significant investment for most enterprises. In a new report, Omdia has found substantial budgets are being spent on AI in 2023, and that AI budgets will increase in 2024. 

“42% of our surveyed companies have 2023 AI budgets of $1 million or more, 23% have budgets of $2 million or more and 9% have budgets of $5 million or more,” said Mark Beccue, Principal Analyst, Omdia, “ The spending trend is consistent regardless of company revenue, region, or vertical. There are logical differences—enterprises with smaller revenue spend less than those with larger revenue, and verticals with more mature AI use cases spend more than others.” 

Omdia fielded a survey of 369 enterprises in February 2023 as interest in Generative AI exploded. Budgets for 2023 were likely set before the Generative AI movement.

Growing AI spend has significant implications:

• AI cannibalizes other priorities. AI budgets are likely cannibalizing budgets that were previously dedicated to other IT and operations initiatives.
• AI lifecycle’s accelerated learning curve will test leadership patience. There will be increased pressure for organizations to quickly become competent and show results. 
• Pressure on organizational culture. Increasing AI budgets typically mean leadership expects material results within a defined timeframe. AI initiatives blossom within organizations that have a good process for innovation; these organizations tend to transcend organizational silos to address “greater good” themes for initiatives. Organizations with parochial cultures will struggle to produce results.
• Increased urgency for KPI measurement. With formalized AI budgets, organizations must develop and report on specific AI KPIs. 
• Accelerated development of an AI-ready organization. Substantial AI budgets will reflect the importance of tuning the overall organization. Investments will be made to build more formalized organizational structures for managing the people and processes that support operationalized AI.

   

Other key insights, particularly how much enterprises are spending and what they are spending it on are examined in Omdia’s AI Budgets: Best Practices 2023 and AI Budgets 2023: Data. The reports provide analysis and the opportunity to  dive into the survey questions to look at different slices of data – by vertical, region or company revenue.