Enterprise spending on generative artificial intelligence (AI) increased sixfold in 2024 as businesses began implementing the technology after first experimenting with it.
This spending reached $13.8 billion, up from $2.3 billion in 2023, venture capital firm Menlo Ventures said in a Wednesday (Nov. 20) press release.
“2024 marks the year that generative AI became a mission-critical imperative for enterprise,” Joff Redfern, partner at Menlo Ventures, said in the release. “The numbers tell a dramatic story of organizations moving beyond pilots to embedding AI at the core of their business strategies.”
Seventy-two percent of enterprise IT decision-makers from companies with 50 or more employees expect to see broader adoption of generative AI “in the near term,” the release said.
At the same time, the decision-makers said the transformation is not yet large in scale, as enterprises are focusing on high-value use cases for the technology, according to the release.
Generative AI is being deployed across departments, the release said, with IT leading the way and accounting for 22% of spending. Other teams and their share of spending on the technology include product (19%), support (9%), data science (8%), sales (8%), marketing (7%), human resources (7%) and finance (7%).
Healthcare is the leading vertical in terms of spending on generative AI, at $500 million, per the release. Other top verticals include legal services ($350 million), financial services ($100 million) and media/entertainment ($100 million).
As for foundation models, the release said that organizations typically deploy three or more such models and that OpenAI’s enterprise market share declined from 50% to 34% since 2023, while Anthropic’s share increased from 12% to 24%.
“With foundational infrastructure in place, enterprises can now shift their focus to the application layer, driving innovation and competition in real-world use cases,” Menlo Ventures Partner Tim Tully said in the release. “We expect to see the true value of AI emerge — transforming industries and unlocking entirely new markets.”
The financial sector stands on the brink of a major shift as AI tools become more integrated into banking, according to the PYMNTS Intelligence and NCR Voyix collaboration, “Is AI the Master Key to Banking’s Next Era?”
The report found that 72% of finance leaders are actively using AI in their operations.
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