AI Adoption Will Strain IT Budgets Even With Disciplined Spending Plans

Thoughtful deployment of artificial intelligence will nonetheless drive up IT spending across enterprises as the technology becomes embedded in day-to-day operations, according to research from Bain & Co. released Thursday. The consulting firm's analysis of projected spending patterns indicates that a typical consumer packaged goods company with $10 billion in annual revenue could experience a 75% increase in IT costs by 2035. The firm cautioned that without disciplined cost management practices, the growth trajectory could accelerate even further.

Bain & Co. suggested several strategies to help organizations manage this financial pressure. The firm advised that company leaders evaluate each initiative through the lens of investment returns, bringing greater analytical discipline to decision-making. Enhancing transparency around technology spending allocations and channeling productivity gains from AI back into reinvestment cycles can foster more prudent fiscal management.

For enterprise decision-makers, budget considerations have become increasingly urgent as new expense categories emerge from integrating AI into established systems. Gartner projects that expenditures dedicated to AI infrastructure and software platforms will surge by more than 63% compared to the previous year, reaching $64 billion. The broader adoption of AI across organizations, coupled with intensified computational requirements, is fueling a 14.2% year-over-year expansion in worldwide IT spending, according to the research firm.

Multiple factors are contributing to this spending acceleration. Bain & Co. identified system architecture becoming more intricate, elevated security and compliance expenses, and expanded data management obligations as key drivers. Additional pressures stem from recruiting specialized talent and the rapid cycle of AI technology becoming outdated.

Although Bain & Co.'s projections centered on the consumer packaged goods industry, the firm believes comparable spending patterns will materialize across other sectors. According to Danielle Burgs Escobar, who leads Bain & Co.'s enterprise technology division in the United Kingdom, "Probably more or less extreme, and also on different timescales … but I think that the trend is going to be pretty universal," she told CIO Dive.

As expenditures climb, many enterprise leaders are adopting a more restrained stance toward AI implementation. Numerous organizations have struggled to quantify returns from their existing AI investments, and research has indicated that roughly one-quarter of AI spending produces no value as experimental projects are discontinued.

Yet excessive caution carries its own risks, Escobar warned. "If you underinvest, you get left behind," she explained. "Your competitive advantage erodes, you do things the old way and you're not taking advantage of technology."

Conversely, excessive spending creates distinct challenges. "When you overspend, you lose credibility with your organization and become just a cost center, rather than driving the return on investment that the overall organization really needs," Escobar stated.