AI Business Spending Is Surging, But Can It Last?

Business investment in generative artificial intelligence (AI) is surging as companies seek to capitalize on its potential.

In 2024, generative AI business spending jumped to $13.8 billion, a sixfold increase from 2023, according to a recent report from Menlo Ventures.¹

This 500% increase in generative AI spending suggests that companies are betting on the emerging technology's ability to enhance business productivity by generating code, analyzing large datasets, and drafting legal documents.

The question now is which investments will deliver lasting value and which ones may fade as AI hype moderates. Investments tied to improving core processes — such as supply chain optimization, predictive analytics and research, forms processing, and customer experience/journey applications — are more likely to endure because they address ongoing challenges that directly impact profitability.