How much are companies spending on GenAI?

The Answer: $15B or less than 1% of total IT budgets

Based on our research, we estimate that businesses will spend ~$15B in generative AI this year. For context, this is less than 1% of the $2T US IT spend.

Breaking this spend down further:

- Large F500 enterprises to account for ~2/3 of the total; Midmarket and SMB to account for ~1/3

- Within F500 enterprises, half will be spent on open-source initiatives. The other half will be spent on closed-source LLM APIs such as OpenAI and Anthropic, or third-party end user applications

- Within open-source, 60% will be spent on compute and 40% spent on internal salaries, and external tools & services

Going forward:

- We believe overall spending will likely at least double in 2025. Even with that, GenAI will account for <2% of IT budgets.

- We believe areas where spend will grow fastest are DIY open-source and inference compute

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