Startup ARR is less secure than ever, new research shows

AI has ushered in a lot of never-happened-before moments, but one of the most transformative is its impact on enterprise IT. Companies that have historically been cautious and committed long-term to what they buy are on pace to spend $4.25 trillion on technology in 2026, market researcher IDC predicts. It’s almost all driven by AI.

New research from venture capital firm Madrona shows that 74% of 150 enterprise IT professionals it surveyed plan to expand their AI budgets in the next 12 months, and the rest plan to hold spending steady. Yet these same enterprises say that fewer than half of their AI pilots ever make it into full production.

That’s actually an improvement. Last year, MIT famously reported that 95% of enterprise AI projects had failed in terms of ROI. Fewer than half succeeding is a pretty low bar, but it’s better than a 5% success rate.

But...

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