Reasoning
Enterprise AI budgets have been on an exceptionally high growth trajectory since 2023, with most industry surveys (Gartner, IDC, McKinsey) showing YoY growth rates of 25-35% in 2024-2025. However, several structural factors suggest moderation by 2026: (1) macroeconomic normalization with interest rates stabilizing higher than pre-2022 levels, increasing IT budget scrutiny; (2) the law of large numbers—AI spending has already grown to represent 8-12% of enterprise tech budgets, making triple-digit growth rates mathematically constrained; (3) evidence of "pilot fatigue" appearing in mid-2025 reports, with organizations demanding ROI proof before scaling AI investments; (4) competitive commoditization of foundational AI models reducing differentiation spend. A sub-20% growth rate (while still substantial) represents a deceleration from current trajectories but remains elevated versus historical enterprise software adoption rates (~10-15%). The probability weights toward sub-20% growth because the exceptional 25-35% rates are unlikely sustainable given normalization pressures, though cyclical AI hype could sustain higher growth if major capability breakthroughs occur.Key uncertainty
Whether a significant new AI capability breakthrough (e.g., multimodal reasoning, autonomous agents reaching production viability) occurs before Gartner's 2026 survey, which could reignite aggressive budget expansion and push growth back above 20%.