Large businesses, particularly those with revenues exceeding $500 million are making substantial investments in artificial intelligence, according to a recent study by Boston Consulting Group.

According to the survey, these companies are dedicating an average of 5% of their revenue to AI initiatives, with one-third of businesses across all markets planning to allocate $25 million or more to AI in 2025.

The Boston Consulting Group AI Radar, based on a survey of 1,803 senior executives across 19 markets and 12 sectors, highlights that 75% of companies rank AI as a top-three strategic priority. However, only 25% report achieving significant value from these investments

Top-performing firms allocate over 80% of their AI budgets to transforming core functions and innovating new offerings. In contrast, less successful companies dedicate 56% of their AI investments to smaller-scale productivity efforts.

Many businesses face challenges in realising value from AI due to fragmented efforts. Nearly one-third (31%) of surveyed companies admit to not tracking any key performance indicators (KPIs), whether financial or operational. Moreover, 60% fail to define or monitor financial KPIs that measure AI-driven value creation. This lack of focus often results in diluted efforts and reduced ROI.

Leading companies, by contrast, adopt a more concentrated approach, prioritising an average of 3.5 AI use cases compared to 6.1 for other organisations. This strategic depth enables them to anticipate 2.1 times greater ROI on their AI initiatives.

Stuart Harvey, CEO of Datatactics commented: “Embracing AI as the cornerstone of business innovation represents an exciting leap forward for businesses to achieve competitive advantage and operational excellence. However, with this power comes a heightened responsibility to uphold rigorous standards in data governance, privacy and ethical application.

AI’s effectiveness is tied to the integrity of the data it consumes. Yet many organisations struggle with fragmented data systems, including inconsistent or outdated information which can undermine AI’s potential and introduce significant risk.”

He added: “To truly capitalise on AI investments, organisations must prioritise a robust, forward-looking data strategy. This includes ensuring data quality, accessibility, and alignment with business goals to unlock sustainable value while mitigating the pitfalls of poor data management.”

In the UK, 65% of surveyed businesses with revenues over $500 million anticipate spending $25 million or more on AI by 2025. With IT budgets typically allocated between 3% to 5% of revenue, the projected AI expenditure highlights a growing trend of investing beyond traditional IT functions.

Much of the existing IT budget is focused on maintaining current systems and ensuring cybersecurity, leaving AI as a distinct and prioritised area of growth.

Sachin Agrawal, Managing Director for Zoho UK commented: “Artificial Intelligence is already having a transformative impact on businesses, enabling efficiencies in areas like data analysis, fraud detection and forecasting which deliver tangible benefits to people and organisations.
However, the path to broader AI adoption is not without challenges. Companies in the UK are navigating critical issues around AI regulation and data privacy as they develop and implement sophisticated AI systems.”

He added: “The UK has yet to establish comprehensive frameworks for AI governance. Renewed commitments to responsible AI development and ongoing efforts by policymakers and industry leaders signal growing recognition of the need for robust regulatory measures. For instance, a recent Digital Health Study revealed that 78% of businesses have either integrated AI into their operations or plan to invest heavily in the technology.”

As AI adoption accelerates, businesses will require guidance from government regulators and educators and these entities should work together to establish frameworks that promote safe, ethical and effective use of AI systems.”