AI Budgets Soar, Other Tech Gets Left Behind

As AI continues to grow and integrate into companies, AI budgets are on the rise. According to new research from Deloitte, AI spending is up, as are digital budgets on the whole:

“This year’s findings show that while respondents have increased their overall digital investment budgets, they are becoming more selective about where those dollars go. Out of the 20 technology capabilities we tracked, AI and generative AI were the clear front-runners, with 74% of surveyed organizations reporting investments in those capabilities over the past year. That’s nearly 20 percentage points higher than the next most popular areas among respondents—data management, cloud platforms, Internet of Things, and enterprise resource planning technologies.”

This growth is not without its drawbacks. While AI is getting increased funding, other technology investments are getting overshadowed. Critically important, but less flashy investments like cybersecurity are lagging. Deloitte notes that:

“Cybersecurity also continues to lag: only 25% to 32% of respondents invested in identity management, federated security, or zero trust in the past year, potentially leaving future applications and infrastructure at risk if budgets don’t expand to accommodate additional investments through 2028”

Lagging cybersecurity budgets present a risk. With money being poured into AI, companies may be overlooking investments that protect their AI developments. Additionally, neglecting core functionalities in favor of new AI investments is a recipe for unstable software. This was exactly the point JP Morgan Chase made in an open letter to their software vendors back in April. AI is the current “big thing,” and companies are expecting serious ROI from their AI investments. However, these must be balanced with critical digital infrastructure and cybersecurity funding. Otherwise, companies open themselves up to significant digital risks.