Enterprises are throwing money at AI

AI has become a significant investment for most enterprises – with 42% now having a dedicated budget of $1 million or more – according to a report by market analyst Omdia.

The report found that while substantial budgets are being spent on AI right now, the 369 participating enterprises were surveyed in February 2023, and budgets for this year were likely set before the current buzz/terror around generative AI. As such it says AI budgets will increase even further 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.”

The report identifies a number of upshots in this rise in spending, such as a trend for AI budgets to start cannibalizing budgets that would previously be spend on other IT and operations, and that there will be increased pressure for organizations to quickly become competent with the new tools and show results, produce formalised AI budgets and specific KPIs.

It also expects AI initiatives to ‘blossom within organizations that have a good process for innovation’, and that investments will be made to create organised structures for managing the staff and processes that support ‘operationalized AI.’

How all this AI spending will translate into corporate actions will vary and probably isn’t exactly clear even to those getting their wallets out. But it seems all sorts of companies are more than happy to dive in, including fish farms.

Today Telefónica Tech declared it has drawn up plan to plug in AI systems to Stolt Sea Farm’s 14 land-based turbot and sole aquaculture sites in Spain, Portugal, France, Iceland and Norway.

Machine learning algorithms are intended to provide Stolt Sea Farm with patterns to improve its planning, and advanced analytics are supposed to generate estimates of customer orders and more efficiently manage the fish to be slaughtered. AI and Big Data tools will also be used to more accurately quantify the number of turbot and sole ‘fingerlings’ that need to be brought into the farms to ensure they reach the right size. So you can certainly say it’s a pretty bespoke deployment – but it’s illustrative that AI can be plugged into all sorts of businesses.

What a long way we’ve come in such a short amount of time. Five minutes ago, keeping up to date with the boundaries of cutting-edge AI probably meant reading about how some smarty-pants supercomputer had embarrassed a professional Go player in front of all his family and friends – now it’s everywhere, and everyone is talking about.

Fears about potential disruption to job markets, which kicked up a notch earlier in the year when chat GPT first reared its chatty head, will not be appeased if the corporate world is indeed eagerly launching itself headfirst into this unknown future with increasingly hefty budget splurges. When it all shakes down, we shall have to pensively wait and see how AI fits in within current corporate structures, or indeed how us mere flesh-based corporate assets fit in with it.

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