AI Spending Expected to Surge 52% Beyond IT Budgets: Study

A new global study from the IBM Institute for Business Value found that surveyed retail and consumer product executives are dramatically shifting their focus toward artificial intelligence (AI), with responses indicating that participants project spending outside of traditional IT operations could surge by 52% in the next year. The report, titled “Embedding AI in Your Brand’s DNA,” reveals how brands are preparing for the next phase of AI-driven transformation across the enterprise.

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By 2025, retail and consumer products companies surveyed say they plan to allocate an average of 3.32% of their revenue to AI—equivalent to $33.2 million annually for a $1 billion company. This investment is set to span functions such as customer service, supply chain operations, talent acquisition and marketing innovation, highlighting AI’s expansion beyond traditional IT applications.

“AI is no longer just a tool; it’s a strategic imperative,” says Dee Waddell, global industry leader, consumer, travel & transportation industries at IBM. “Retail and consumer product companies are at a tipping point where embedding AI across their operations can help define not just productivity gains, but the future of brand relevance, engagement and trust.” 

Key Takeaways:

• Key findings include: 
• Rapid Adoption Across the Enterprise: The report found that 81% of surveyed executives and 96% of their team are already using AI to a moderate or significant extent. Executives indicate they want to expand AI usage to more sophisticated use cases, such as integrated business planning where they plan to increase usage by 82% in 2025. 
• Workforce Transformation:  Executives surveyed expect that 31% of employees will need to learn new skills to work with AI in the next year, increasing to 45% within three years. AI use in customer service, particularly for personalized responses and follow-ups, could grow by 236% in the next 12 months when compared to the prior year based on survey responses. Notably, responses indicate that 55% of these improvements are expected to involve human-AI collaboration, while only 30% would be fully automated—highlighting the need to equip employees for seamless AI integration. 
• AI Ecosystem Platforms: Investment in ecosystem platforms—tools that facilitate exchange of data and AI models—could skyrocket. Respondents indicated they expect growth from 52% today to 89% within three years as their companies look to blend AI capabilities with business and technology partners to accelerate innovation and drive efficiencies. 
• AI Governance Gap: Despite 87% of surveyed executives claiming to have clear AI governance frameworks, fewer than 25% have fully implemented and continuously review tools to manage risks like bias, transparency and security. This reveals a critical gap in operational oversight.