The Age of Wild AI Spending Ends, As Clients Demand Financial Returns, Assurances

Well, whaddya know? Corporate AI FOMO had a shelf life. 

Big tech companies, AI startups, Wall Street analysts and venture investors are all reporting that sales of AI models, apps and software are harder and slower in 2026 than they were last year as growing questions are raised about both operating impact on performance as well as financial returns for businesses being asked to make significant investments in AI. Tech companies already facing challenges about rosy 'vibes' that were unaccompanied by reliably, detailed projections and which may be rendered irrelevant by new developments in the field. While this is consistent with previous tech introductions, it is reportedly coming as something of a shock to the AI industry which had become accustomed to unquestioning customers agreeing to any deal proposed. This is hopefully a sign that sanity is beginning to impose itself on AI. JL
Isabelle Bousquette reports in the Wall Street Journal: 

The golden age of unbridled spending on AI might be behind us. Vendors say big companies have become more cautious about what they buy. They’re taking longer to evaluate solutions, involving more legal and finance teams, and placing more emphasis on the financial returns they might get out. The breakneck pace of AI innovation is also making customers wary of sales commitments. Last year, spurred by corporate FOMO and an aggressive campaign from tech giants, enterprises spent more than $1.249 trillion in software. (But) they found it was hard to measure financial returns. And what they could measure wasn’t impressive. "They are trying to understand the outcome of a purchase, not just following the hype.” 

The golden age of unbridled spending on AI software might be behind us, as vendors say it’s a lot harder to make a sale than it used to be. 

Last year represented something of a boon era for vendors peddling AI apps. Spurred by board-level mandates, corporate FOMO and an aggressive campaign from tech giants about the world-changing capabilities of AI agents, enterprises were spending willingly and wildly—an estimated total of more than $1.249 trillion in software, according to research and advisory firm Gartner.

Alex Levin, co-founder and chief executive of AI-powered customer service startup Regal, said until recently he could make an enterprise sale with a single demo—a phenomenon he called “shocking,” given how big companies can sometimes take one to two years to make a purchase. Last year, Levin said he was closing deals in as little as 60 or 90 days.

That isn’t the case anymore.

Vendors say big companies have become more cautious about what they buy. They’re taking longer to evaluate solutions, involving more internal stakeholders from legal and finance teams, and placing more emphasis on the kind of financial returns they might get out of the investment. The breakneck pace of AI innovation—like recent updates around Anthropic’s Claude—is also making potential customers wary of sales commitments.

“There was a period where the early adopters were moving very fast on really interesting technology and that piece has slowed down,” Levin said. The typical time for completing a sale is now about six months, he said.

 

“Everyone is a bit more cautious,” said Craig Roth, a vice president analyst at Gartner. “I think reality has set in.” 

Early adopters who rushed into AI pilots and even deployments last year often hit a wall and learned some hard lessons. It wasn’t necessarily because the technology didn’t work, but because they found they didn’t have the right guardrails or didn’t fully understand the reality of the business process they were trying to automate, Roth said. Critically, they found it was hard to measure financial returns. And what they could measure wasn’t overwhelmingly impressive, he said.

In a Gartner survey released in April 2025, only 11% of customer service and support leaders said generative AI met their primary business objective—striking, since customer service has emerged as one of the most mature areas for deploying the technology.

Businesses are certainly continuing to invest in AI tools. Gartner expects software spending to grow 14.7% this year to about $1.434 trillion. But now that businesses are mature enough to understand those potential roadblocks, they are taking longer to evaluate and being more critical of potential solutions, Roth said. "They are trying to understand what the outcome of a specific purchase is, not just following the hype,” said Kyle Chu, senior manager of Business Intelligence at phone-accessory maker PopSockets.

Kathy Kay, chief information officer and executive vice president of global financial services firm Principal Financial Group said she’s taking her time to think deeply about whether a given vendor will even be around or be useful in a few years, “which could make it seem like the sales cycle is longer to a company calling on us,” she said.

Big tech players like Microsoft and Google, who have increasingly moved to bundle generative AI tools into existing broader offerings, are less affected. But, for smaller companies whose AI offerings are their raison d’être, there are pros and cons of the new era.

It might be harder to get in the door, but once they do, they find enterprises want to use the solution more broadly, and get everything they can out of it.

Many say the difference manifests in terms of who shows up in the procurement meetings. 

Are Traasdahl, founder and CEO at AI-powered retail data platform Crisp, said he’s engaging more with non-tech C-level executives than ever before, and they want to ensure the solution works consistently across the business, rather than just speaking with a leader in one siloed part of the company. 

Oisin Hanrahan, co-founder and CEO of AI-powered manufacturing software startup Keychain, agreed. 

“In 2025, business unit leaders could make decisions,” he said. “Now, if you go into the conversation, you see someone from finance show up. You see someone from legal show up in addition to the business unit, which tells you ‘Hey, we’re taking this much more seriously.’”

Hanrahan added, “The threshold for a pilot has gone up across the board.”