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Business spending on AI surged 500% this year to $13.8 billion, says Menlo Ventures

Nov 20, 2024 - cnbc.com
Business spending on generative AI has increased by 500% this year, from $2.3 billion in 2023 to $13.8 billion, according to data from Menlo Ventures. The report also revealed a shift in market share among AI companies, with OpenAI's share falling from 50% to 34%, while Anthropic doubled its share from 12% to 24%. The shift is attributed to the advancement of Claude 3.5 and the trend of companies using multiple large AI models.

The report also highlighted the rise of AI agents, which are seen as an evolution of chatbots and can perform complex tasks on behalf of users. AI agents are a leading trend and investment area in 2024, with companies like Google, Microsoft, Amazon, OpenAI, and Anthropic pursuing the technology. The leading use case for generative AI is code generation, followed by support chatbots, enterprise search and retrieval, data extraction and transformation, and meeting summarization.

Key takeaways:

  • Business spending on generative AI surged 500% this year, from $2.3 billion in 2023 to $13.8 billion, according to data released by Menlo Ventures.
  • OpenAI's market share in enterprise AI declined from 50% to 34%, while Anthropic doubled its market share from 12% to 24%.
  • Large language models, such as OpenAI's ChatGPT, Google's Gemini, and Anthropic's Claude, still dominated enterprise spend, with $6.5 billion in enterprise investment.
  • Code generation is the leading use case for generative AI, with more than half of survey responses naming that as a dominant use, followed by support chatbots, enterprise search and retrieval, data extraction and transformation, and meeting summarization.
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