Enterprises Tap the Brakes on Tech Budgets While Demanding AI ROI

While spending on artificial intelligence infrastructure is expected to drive a 14.2% increase in global IT spending this year, not all enterprises are raising their spending that much, the Wall Street Journal reported Friday (Aug. 28), citing a forecast by Gartner.

Enterprises’ technology budgets are being challenged by inflation, supply shortages, rising hardware costs, AI initiatives and new priorities, according to the report.

Surveying three chief information officers about their own AI and tech budgets, the WSJ found that they are cutting costs in traditional IT expenses to fund AI, incorporating AI into multiple lines on the IT budget, seeking ways to measure AI’s return on investment, identifying and focusing on areas where AI will deliver the greatest results, and directing resources to area where the technology has already proven to deliver.

PYMNTS reported in July that after two years of unchecked growth in AI spending, with companies pushing employees toward the biggest AI models and the heaviest usage as if consumption were a sign of progress, companies are now scrutinizing their spending.

The PYMNTS Intelligence report “The Enterprise AI Payback Curve: Adoption Accelerates as Returns Take Shape” found that among financial services, healthcare and media firms, nearly all respondents say artificial intelligence is performing well in the functions in which it has been deployed and that their return on investment over the past 12 months has been positive.

However, most firms say the real payback on their AI investments will come in five to six year, according to the report.

“While the payback clock may be down the road, enterprises overwhelmingly plan to increase their AI investment budgets,” the report said. “At least eight in 10 enterprises expect to boost new-AI spend next year, and none expect to slow down from their current levels.”

TD Bank Group reported Thursday (Aug. 27) that it delivered 195 million Canadian dollars (about $141 million) in AI value in the first three quarters of its fiscal year 2026. The bank said it is focusing its AI investment on retail end-to-end credit, the software development cycle and contact centers.

Lowe’s said Thursday that its AI shopping assistant contributed to the company’s 15.7% year-over-year growth in online sales. Shoppers who engage with the assistant online convert at three times the rate of those who don’t, the company said.