47% of Technology Leaders Say AI is Top Spending Priority for the Next 12 Months

New CNBC survey shows trends for non-tech companies

CNBC surveyed its cross-industry Technology Executive Council and found that 47% identify AI as their top spending priority over the next year. This is more than double the 21% that say cloud computing is the top priority.

Overall, nearly two-thirds say their AI investments are accelerating, and it is a bigger piece in a smaller overall pie: a little over half of tech executives (53%) say the rise in interest rates has caused them to slow overall spending… 

Tech executives [said in the second half of 2022] that cost-cutting pressures due to fears of a recession were their top tech challenge over the next year. That was down from over 30% last year to 16% now, and there was a big rise in survey respondents who said the biggest tech challenge now was meeting customer demand for tech-driven products and solutions, up from 9% to 26%.

…

“It’s hard to think of an area that this couldn’t help,” said Diogo Rau, Eli Lilly chief information and digital officer. 

He said Lilly already is using generative AI to write patient safety reports and clinical narratives, and ultimately, it will play a role in drug discovery. “What I’m excited about is what machines can come up with that no human might have imagined, such as new molecules for medicines,” Rau said. 

The survey was conducted in May and June of 2023 and includes technology executives at companies that are not in the tech sector but purchase a wide variety of technology products. Key roles represented in the survey sample include chief information officers, chief technology officers, and chief information security officers. Key industry sectors are listed as “including marketing, pharmaceuticals, telecom and utilities, and from public sector entities.” 

The Big 3 Tech Spending Priorities

Cloud computing has long been a large and growing cost center for companies across industries, and that will continue. It is worth noting that investment in AI, particularly in generative AI, likely leads to more cloud spending. Cybersecurity is also a stalwart of technology spending, but AI eclipsed it in this year’s survey.

Cloud computing remains the most critical tech area for most companies, with 63% of TEC members citing the cloud as critically important for their company’s tech strategy over the next 12 months, but it barely edged out the 58% of respondents who cited AI. Cybersecurity also continues to be a major threat, with 42% of respondents saying ransomware is a bigger concern today than a year ago.  

A Focus on Margins

Generative AI, in particular, has changed the technology spending priorities overnight. Whereas recession fears led 30% of executives to say cost-cutting was their biggest challenge last year, that number is only 16% today. Much of that is related to the imperative to adopt generative AI.

There are many drivers behind generative AI adoption. Technology companies rush out generative AI features daily to match competitors or get an edge on them. CNBC’s data show that technology leaders in companies outside of tech are most likely targeting productivity benefits today. That is another way to save on cost. In 2022 the budgets focused on cost-cutting. Over the next year, it looks like technology executives are targeting productivity from AI to improve operating margins.

Despite this focus on productivity, 47% of the technology executives believe that AI will positively impact job growth, while just “26% said it will destroy more jobs than it creates.”