2025: The State of Generative AI in the Enterprise

For all the fears of over-investment, AI is spreading across enterprises at a pace with no precedent in modern software history. Enterprise AI has surged from $1.7B to $37B since 2023, now capturing 6% of the global SaaS market and growing faster than any software category in history.

AI Boom vs. Bubble

For nearly three years, AI enjoyed unwavering confidence and record capital flows. The surge crowned Nvidia the world's most valuable company in mid-2024. Foundation models announced close to $1 trillion in AI infrastructure commitments.

Then the euphoria peaked. An MIT study claiming that 95% of generative AI initiatives fail rattled markets over the summer. However, the demand side tells a different story: broad adoption, real revenue, and productivity gains at scale signal a boom versus a bubble.

Follow the Money

Our data indicates companies spent $37 billion on generative AI in 2025, up from $11.5 billion in 2024, a 3.2x year-over-year increase. The largest share, $19 billion, went to the user-facing products and software that leverage underlying AI models.

Buying vs. Building

For a while, the prevailing wisdom was that enterprises would build most AI solutions themselves. In 2024, 47% of AI solutions were built internally. Today, 76% of AI use cases are purchased rather than built internally. Enterprises prefer ready-made AI solutions that reach production more quickly and demonstrate immediate value.

Conclusion

In 2025, more than half of enterprise AI spend went to AI applications, indicating that modern enterprises are prioritizing immediate productivity gains vs. long-term infrastructure bets. The path to production has taken shape, and distinct patterns have emerged that break from traditional SaaS.