Fortune 500 companies continue to beef up AI budgets: Wedbush analysis

Good morning. CFOs are keen on determining the use cases for AI that deliver business value. And the process for doing so could be becoming less complicated. 

Wedbush Securities has been monitoring dozens of Fortune 500 and Global 2000 companies over the past few weeks, according to a Monday investor note. Of the companies analyzed, overall, the firm estimates that AI now comprises roughly 12% of many IT budgets for 2025, up from 10% in January. In some cases, AI takes up to 15% of the budget, reflecting how many CIOs plan to accelerate their AI strategies over the next six to nine months. The companies analyzed were across verticals such as financial services, health care, transportation, logistics, manufacturing, software, and the services industry. 

“About 70% of customers we have spoken with heading down the AI path have accelerated their AI budget dollars and initiatives over the last six months,” according to the firm.

Dan Ives, managing director at Wedbush, shared some insight about the research findings. In November and December, his firm found that customers were in the strategic planning stage for AI, Ives told me. But the application of the technology has picked up speed, he said. Enterprises are more readily identifying high-priority use cases, Ives said. He attributes that to tech companies like Palantir and Salesforce among others making use cases more evident, he noted.

Companies are also seemingly more knowledgeable about AI governance solutions and data security, especially when it comes to implementing generative AI. When the technology became widely popular in late 2022 due to OpenAI’s ChatGPT, many companies tread lightly at first, especially in the financial services sector. Another interesting finding: According to McKinsey, a CEO’s oversight of AI governance is one element most correlated with higher self-reported bottom-line impact from an organization’s generative AI use. That’s particularly true at larger companies, according to the firm.

“It's an arms race,” Ives said of AI. “Enterprises can’t slow down AI spending because of tariffs or near-term macro uncertainty.” Why? If they slow it down, they lose their spot in line for Nvidia chips, for example. “You’ll have to get to the back of the line,” he said.

Speaking of Nvidia, Wedbush estimates that for every dollar spent on Nvidia chips, there is an “$8-$10 multiplier across the rest of the tech ecosystem.” So essentially, the use of Nvidia chips creates more spending on AI by tech companies and customers.

During a keynote address at Nvidia’s annual GTC conference last week, CEO Jensen Huang said manufacturers interested in implementing AI into their product lines will soon need two factories, including one solely for AI, Fortune reported.

“Every industry, every company that has factories will have two factories in the future,” Huang said. He offered examples: “Factories for cars, factories for AI for cars. Factories for smart speakers, factories for AI for the smart speakers.” 

The enterprise AI consumption phase will continue throughout 2025, Wedbush predicts. "We're still in the early stages of what I really view as a fourth industrial revolution,” Ives said.

Sheryl Estrada
sheryl.estrada@fortune.com

This story was originally featured on Fortune.com