A new survey of 600 US IT leaders shows companies are moving quickly from testing AI to implementing it across their organizations. Total AI investment jumped from $2.3 billion in 2023 to $13.8 billion in 2024.
The survey was conducted between September and October 2024 by US venture capital firm Menlo Ventures, which invests in several AI startups including OpenAI competitor Anthropic and vector database provider Pinecone. The study included IT decision-makers from companies with at least 50 employees.
The results indicate companies now see AI as a core technology rather than just an experiment. About 72 percent of IT decision-makers expect AI tools to become even more widespread in their operations soon.
Despite increased spending, companies are still figuring out their AI strategy
More than one-third of IT leaders say they still lack a clear plan for using AI in their organizations. This suggests many companies remain in early stages of adopting the technology.
The funding sources for AI projects are shifting. While 60 percent of AI spending still comes from innovation budgets, 40 percent now comes from regular operational budgets - showing AI is becoming a standard business tool.
IT departments account for the largest share of AI spending at 22 percent, followed by product and engineering teams at 19 percent. Customer-facing departments like support (9 percent), sales (8 percent), and marketing (7 percent) are also starting to use more AI. Only legal departments lag at 3 percent.
Code assistance tops current AI uses
Companies are using AI most heavily for coding assistance, with 51 percent adoption. Support chatbots follow at 31 percent, while enterprise search and data extraction reach about 28 percent. About 24 percent use AI for creating meeting summaries.
Most organizations now use multiple AI models instead of relying on a single vendor. OpenAI's enterprise market share has dropped from 50 percent to 34 percent, with Anthropic gaining much of that market share, according to the study. Menlo Ventures, which conducted the survey, is an investor in Anthropic.
When choosing AI systems, only 1 percent of decision-makers list cost as their main concern. Instead, they prioritize measurable returns (30 percent) and how well tools adapt to their specific industry or company (26 percent).
However, organizations often underestimate technical integration and support needs. Failed AI projects typically stem from unexpected implementation costs (26 percent), data privacy issues (21 percent), and disappointing results (18 percent).
RAG (Retrieval Augmented Generation) technology has seen significant growth in corporate settings, according to the study. Its usage jumped from 31 percent last year to 51 percent in 2024. Companies are also shifting their database preferences, with AI-focused vector databases gaining ground against traditional systems.
However, as with the Anthropic data, these findings should be viewed in context: Menlo Ventures is an investor in Pinecone, a vector database provider.
