The Truth About AI Budgets: Why 70% Goes to the Wrong Places
- dimitris dimitriadis
- October 3, 2025
- Innovate
- AI, AI Budgets, Artificial Intelligence, Digital Transformation, innovation, LLMs, Retrieval-Augmented Generation, TheFutureCats
- 0 Comments
Artificial Intelligence (AI) has become a top priority for most businesses and organizations, with AI budgets continuing to grow steadily. Despite its immense potential, many companies aren’t seeing the outcomes they expect from their AI investments. The issue isn’t a lack of funding, it’s a matter of poor allocation. In fact, nearly 70% of AI budgets are allocated to areas that offer limited value, rather than to initiatives that could truly drive transformation.
More often than not, organizations focus on technical specs or invest in AI tools that don’t align with their core business needs. Instead of directing resources toward areas where AI can deliver the most strategic value, they invest money in narrow applications or standalone tools that fail to produce a lasting impact.
Strategic allocation of AI budgets is key. Rather than investing in generic tools that deliver marginal benefits, the focus should shift to enhancing business operations, boosting innovation, and increasing productivity. AI generates real results when used to accelerate decision-making, optimize workflows, and unlock new growth opportunities.
Take, for example, RAG systems (Retrieval-Augmented Generation), a powerful integration of large language models (LLMs) with trusted sources of knowledge. These systems go beyond just saving time; they reshape your strategy. With RAGs, you gain access to real-time, reliable information, improve decision-making accuracy and transparency, and build a true competitive edge. On the flip side, directing your budget toward generic automation tools that don’t deliver strategic returns will only keep your ROI disappointingly low.
Let’s be clear: AI tools aren’t the solution. They’re the means to reach the solution and unlock AI’s full potential.
To maximize the return on your AI investments, you need to reassess your budget strategy. Invest in tools and systems that offer long-term value, not just short-term appeal. A well-planned AI budget should prioritize the strategic integration of AI into your business’s critical processes, where it can truly deliver innovation, resilience, and value.
Want to learn how to allocate your AI budget wisely and get the most out of every euro spent? The “AI Executive for Business in Action” training by PwC’s Academy and TheFutureCats is your ideal next step. In just two days, you’ll gain a practical, strategic framework for using AI in your business, ensuring every investment delivers the results you need.
