Enterprise AI budgets are up 55% over 2020, Appen says

Enterprises are accelerating their AI strategies as a result of the COVID-19 pandemic and ballooning their budgets accordingly. The seventh annual Appen State of AI report, published today, reveals a significant year-over-year increase in AI budgets at companies of all sizes. Overall, survey respondents report budgets ranging from $500,000 to $5 million per year — a 55% increase over 2020.

“This trend is a strong signal that the industry continues to grow and AI is becoming more critical to the success for companies large and small across all industries,” reads the report.

The report also indicates that decision-makers are moving away from the idea of an AI silver bullet and toward the use of AI to support internal processes. Who is considered an AI decision-maker is also changing. In a reversal of 2020 trends, enterprises are increasingly moving AI responsibility out of the C-suite and into lower levels of the organization. The survey found top executives were responsible for AI initiatives at 39% of the companies surveyed, down from 71% just last year.

For this research, Appen, which provides AI training data, tapped The Harris Poll to survey 501 business leaders and technical practitioners about their priorities, successes, and challenges for implementing AI. The respondents spanned industries and represented companies of all sizes.

Big budgets deliver more deployments

Aside from the increase in AI budgets, the report also sheds light on how companies’ AI funding impacts both their deployments and perceived market leadership. To break this down, the researchers grouped the organizations by AI budget: $500,000, between $500,000 and $1 million, between $1 million and $3 million, and over $3 million.

The findings indicate a direct correlation between budget and market leadership. Those in the lowest bracket — which accounted for 26% of companies surveyed — were much less likely to consider themselves market leaders, suggesting budget is a significant factor in gaining AI leadership. Unsurprisingly, the research also suggests budget correlates with company size, with larger companies investing more. Overall, 53% of AI teams reported budgets in the $500,000 to $5 million range, compared to about one-third in 2020.

The report also showed a significant correlation between budget and deployment. Almost half of companies with budgets over $1 million experienced deployment rates of 61% to 90%, which the report states is “significantly higher” than for those with lower budgets.

Prioritizing AI

A 55% boost in budgets might seem like quite a jump for one year, but enterprises are simply following through on business objectives they’ve already articulated. In last year’s Appen State of AI report, 75% of those surveyed said they believe AI is critical to their business. And while some thought the pandemic would slow business (and in many cases, it did), the 2020 report still anticipated an expansion of AI budgets in 2021. This year’s report has made good on that prediction, while other research shows that, overall, digital transformation is the top businesses initiative this year.

Beyond budgets, scientific output also speaks to the prioritization of AI around the world. Last week, the United Nations Educational, Scientific, and Cultural Organization (UNESCO) unveiled its latest Science Report — a massive undertaking published every five years to examine current trends in science governance. For the first time, the report includes a deep analysis of AI and robotics, going beyond just the global leaders and examining AI research, funding, and strategies in almost two dozen countries and global regions. Overall, the researchers — 70 authors from 52 countries, who compiled the report over 18 months — determined that AI “dominated scientific output” in recent years.