Enterprises Tap the Brakes on Tech Budgets While Demanding AI ROI

Artificial intelligence (AI) infrastructure spending is projected to boost global IT expenditures by 14.2% this year, according to a Gartner forecast reported by the Wall Street Journal on August 28. However, not all companies are increasing their budgets in response to this trend, as they are grappling with inflation, supply chain disruptions, rising hardware costs, AI initiatives, and changing priorities.

A recent survey of three chief information officers revealed that these executives are curtailing costs in conventional IT expenses to allocate funds towards AI. They are also integrating AI into various sections of their IT budget, exploring methods to quantify AI's return on investment, and zeroing in on areas where AI is expected to generate the most significant benefits. Moreover, they are directing resources towards sectors where AI has already demonstrated its value.

The PYMNTS Intelligence report, "The Enterprise AI Payback Curve: Adoption Accelerates as Returns Take Shape," published in July, notes that following a period of unbridled AI spending growth, businesses are now closely examining their expenditures. The report found that among financial services, healthcare, and media firms, virtually all respondents reported that AI is performing well in the areas where it has been implemented, and they are experiencing positive returns on their investments over the past year.

Nevertheless, most firms anticipate that the true value of their AI investments will manifest in the next five to six years. Despite this, "at least eight in 10 enterprises plan to increase their AI investment budgets," the report stated. "None expect to decelerate from their present levels." TD Bank Group disclosed on August 27 that it generated 195 million Canadian dollars (approximately $141 million) in AI value during the first three quarters of its fiscal year 2026.

The bank is concentrating its AI investments on retail end-to-end credit, software development, and contact centers. Similarly, Lowe's reported on the same day that its AI-powered shopping assistant contributed to the company's 15.7% year-over-year growth in online sales, as shoppers who interact with the assistant online convert at three times the rate of those who do not.