.png)
November 29, 2024
A new study by US venture capital firm Menlo Ventures shows that companies are accelerating the transition of AI from the testing phase to enterprise-wide implementation. Total investment in AI rose from $2.3 billion in 2023 to $13.8 billion in 2024.
The survey was conducted between September and October 2024 by 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 that companies now view AI as a core technology rather than just an experiment. Around 72 percent of IT decision-makers expect AI tools to become even more widespread in their operations in the near future.
More than a third of IT leaders say they do not yet have a clear plan for the use of AI in their companies. This suggests that many companies are still in the 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 operating budgets – a sign that AI is becoming a standard business tool.
IT departments account for the largest share of AI spending at 22 percent, followed by product and development teams at 19 percent. Customer-facing departments such as support (9 percent), sales (8 percent), and marketing (7 percent) are also increasingly using AI. Only legal departments are lagging behind at 3 percent.
Companies most commonly use AI for code assistance, with an adoption rate of 51 percent. Support chatbots follow with 31 percent, while enterprise search and data extraction reach about 28 percent. About 24 percent use AI for creating meeting summaries.
Most companies now use multiple AI models, rather than relying on a single provider. OpenAI's market share in the enterprise sector has dropped from 50 percent to 34 percent, according to the study, with Anthropic gaining much of that market share. Menlo Ventures, who conducted the survey, are an investor in Anthropic.
When selecting AI systems, only 1 percent of decision-makers cite cost as a primary concern. Instead, they prioritize measurable returns (30 percent) and how well the tools adapt to their specific industry or company (26 percent).
However, companies often underestimate the need for technical integration and support. Failed AI projects are typically due to unexpected implementation costs (26 percent), data privacy issues (21 percent), and disappointing results (18 percent).
RAG (Retrieval Augmented Generation) technology has experienced significant growth in the enterprise environment, according to the study. Its use increased from 31 percent last year to 51 percent in 2024. Companies are also changing their database preferences, with AI-focused vector databases gaining ground over traditional systems. As with the Anthropic data, these results should be considered in context: Menlo Ventures is an investor in Pinecone, a vector database provider.
Bibliographie: Menlo Ventures. 2024: The State of Generative AI in the Enterprise. Boston Consulting Group. AI Adoption in 2024: 74% of Companies Struggle to Achieve and Scale Value. Accenture. Going for Growth. PRNewswire. New Economist Impact Study Finds Only 22% of Enterprises Believe Their IT Infrastructure is Ready for AI. Statista. AI corporate investment worldwide 2015-2022. Goldman Sachs. Gen AI: too much spend, too little benefit? McKinsey. Driving impact at scale from automation and AI. Investopedia. These Chipmakers Could Benefit From Record 2024 Data Center Spending, BofA Says. Yahoo Finance. One chart shows how AI will drive another decade of US stock market dominance. Goldman Sachs. The global market for humanoid robots could reach $38 billion by 2035.