Business and enterprise spending on AI surges 500% to $13.8 billion as Anthropic gains market share over OpenAI

While generative AI startups have attracted billions in funding, a parallel surge in business and enterprise spending underscores the growing adoption of artificial intelligence across industries. According to new data from Menlo Ventures, companies have spent $13.8 billion on generative AI tools in 2024—a staggering 500% increase compared to 2023.

However, Menlo’s report presents a conservative view compared to Gartner Research, which reported that $124 billion was spent on AI software in 2022. The firm projects this figure will nearly double to $297.9 billion by 2027, driven by a compound annual growth rate of 19.1%. While Gartner anticipates strong demand for AI software through 2027.

Shifting Market Dynamics: OpenAI vs. Anthropic

This exponential growth in AI investment also reflects a shift in the competitive landscape. Long-time leader OpenAI saw its enterprise market share drop from 50% to 34%, while Anthropic doubled its share from 12% to 24%. Menlo’s survey of 600 enterprise IT decision-makers highlights how businesses are increasingly turning to multiple AI models, with Anthropic’s Claude 3.5 gaining traction as a preferred choice for its capabilities.

Tim Tully, a partner at Menlo Ventures, credits this shift to advancements in Claude 3.5 and a growing trend among businesses to adopt three or more large AI models simultaneously, CNBC reported. “Developers are savvy—they switch between models to find the best fit for specific use cases,” Tully noted. “Claude 3.5 seems to be the top choice in many scenarios.”

Anthropic was founded in 2021 by Dario Amodei, former VP of research at OpenAI, alongside Jack Clark, Sam McCandlish, and Tom Brown. Sensing the transformative power of large-scale AI systems, Dario, along with his sister Daniela, embarked on a mission to create AI systems that are not only scalable but also interpretable and resilient. Before co-founding Anthropic, Daniela Amodei served as OpenAI’s vice president of safety and policy. In June, Anthropic launched Claude 3.5 Sonnet, a new AI model that is 3 times faster than previous models released 3 months earlier.

AI Market Share Snapshot

• Meta: Held steady at 16%.
• Google: Gained ground, rising from 7% to 12%.
• Cohere: Maintained a 3% share.
• Mistral: Declined slightly, dropping to 5%.

Foundation models, such as OpenAI’s ChatGPT, Anthropic’s Claude, and Google’s Gemini, continue to dominate enterprise spending, collectively accounting for $6.5 billion in investments. These models are driving adoption by offering robust capabilities across various business applications.

AI Agents: The Next Frontier

The report also highlights the growing investment in AI agents, a technology poised to surpass traditional chatbots. Companies like Google, Microsoft, Amazon, OpenAI, and Anthropic are betting on AI agents, which can perform multistep tasks, create autonomous workflows, and operate with minimal user input.

“The agent stuff is real—it’s not hype,” Tully explained. “While it won’t cure cancer, it’s already making people more productive and helping companies boost revenue.”

Key Use Cases for Generative AI

The survey revealed that code generation is the most popular use case, with over 50% of respondents citing it as a top application. Other leading uses include:

• Support chatbots (31%).
• Enterprise search and retrieval.
• Data extraction and transformation.
• Meeting summarization.

What Lies Ahead

The rapid acceleration of business spending on generative AI underscores a pivotal shift in enterprise priorities, with companies racing to integrate advanced AI tools to stay competitive. As Anthropic narrows the gap with OpenAI and AI agents emerge as a transformative technology, the sector’s explosive growth shows no signs of slowing.

The evolving dynamics in the AI ecosystem reflect not only technological advancements but also the increasing demand for tools that can deliver measurable productivity gains and revenue growth. The battle for dominance in generative AI is far from over, and businesses appear eager to invest in what they see as the next frontier of innovation.