Spending On AI Predicted To Surge In 2025

Uploaded on 2025-07-09 in TECHNOLOGY-Key Areas-Artificial Intelligence, NEWS-Cybersecurity News, FREE TO VIEW

A new report from Kong, titled “What’s Next for Generative AI in the Enterprise,” reveals that 72% of enterprises plan to increase their spending on large language models (LLMs) in 2025, with nearly 40% expecting investments to exceed $250,000 annually.

The findings, based on a survey of 550 IT leaders, developers, and engineers conducted between 26 February and 31 March 2025, highlight the rapid adoption of generative AI (GenAI) across industries.

As businesses race to harness AI’s potential, the report underscores a shift towards integrating LLMs into core operations, driven by the promise of enhanced productivity and innovation. However, challenges such as security concerns and integration complexities loom large.

Shifting Model Preferences

The report notes a significant shift in LLM usage, with Google’s models gaining ground over OpenAI, which led in 2024. In Q1 2025, 69% of respondents reported using Google’s models, compared to 55% for OpenAI, with Meta and IBM trailing at 38% and 26%, respectively. This surge in Google’s popularity is attributed to its aggressive pricing, extensive developer ecosystem, and integrations via Google Cloud and Workspace, including the rollout of Gemini 2.0 in February 2025.

The report suggests that enterprises are increasingly adopting multiple models - 37% use five or more - to optimise performance and avoid vendor lock-in.

The rise of DeepSeek, used or considered by 80% of respondents, also draws attention, though 68% of non-users cite privacy concerns as a barrier.

Opportunities & Optimism

Enterprises are optimistic about AI’s transformative potential, with 82% of respondents believing GenAI will positively impact their careers and organisations. The report identifies productivity and innovation as key benefits, with 46% viewing AI as a tool to streamline tasks like coding, documentation, and API testing. Another 36% anticipate new job opportunities arising from AI adoption.

Across sectors, AI is automating repetitive tasks, accelerating content creation, and enhancing decision-making.

For instance, AI chatbots are cutting customer support costs by 20–30%, while predictive maintenance tools reduce equipment downtime significantly. These gains are driving AI budgets, which are projected to grow by 5.7% in 2025, far outpacing the 1.8% rise in overall IT budgets.

Challenges To Adoption

Despite the enthusiasm, the report highlights significant hurdles. Data privacy and security concerns top the list, cited by 44% of respondents as the primary barrier to scaling AI. High-profile breaches, such as the Rockerbox incident, amplify these fears. Cost and budget constraints, noted by 24%, also pose challenges, as LLM deployment demands substantial investment in cloud infrastructure and fine-tuning.

Integration with legacy systems, a concern for 14%, further complicates adoption, particularly for older enterprises.

The report also warns of uneven returns, with 60% of firms expecting less than 50% ROI due to poor data quality or unclear KPIs, underscoring the need for strategic planning.

Strategic Recommendations

To maximise AI’s value, the report advocates a structured approach. Enterprises should define clear visions and secure stakeholder buy-in to align AI initiatives with business goals. Centralising vendor management within unified platforms, like Kong’s API gateway, can streamline data pipelines and reduce complexity.

Regular monitoring of KPIs is critical to ensure projects deliver measurable impact, particularly as workflow redesign is shown to drive EBIT growth.

For DeepSeek, firms must weigh its benefits against privacy risks, potentially implementing stricter data governance. As AI becomes a budget priority - Gartner estimates global GenAI spending at $644 billion in 2025 - businesses must balance innovation with robust security measures.

A Competitive Edge

The Kong report paints a dynamic picture of enterprise AI in 2025, where surging investments reflect confidence in GenAI’s potential to reshape operations. Yet, the path forward demands careful navigation of security, cost, and integration challenges.

As Marco Palladino, Kong’s CTO, notes, “AI adoption is accelerating at an unprecedented rate, and organisations that can keep up will have a clear competitive edge.” With strategic foresight, enterprises can unlock AI’s full potential, driving growth in an increasingly AI-driven economy.

Image: Ideogram

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