CEOs Plan to Increase AI Spending in 2026 Despite Weak Returns on Current Investments

CEOs Double Down on AI Spending Despite Lackluster Performance

Corporate leaders at the world's largest companies are preparing to increase AI spending in 2026, even as mounting evidence suggests their current AI investments aren't delivering expected returns. According to a Teneo survey of more than 350 public-company CEOs with at least $1 billion in annual revenue, 68% plan to boost their AI budgets next year 1

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. The survey, conducted this fall, reveals a stark reality: fewer than half of current AI projects have generated returns exceeding initial costs 1

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This commitment to AI investments comes as companies shift from experimentation to execution, yet the slow realization of financial returns is creating friction between corporate leadership and shareholders. AI companies are on track to spend about $700 billion for 2025, with AI investments now accounting for roughly 40% of U.S. GDP growth and AI companies responsible for about 80% of stock market gains 1

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Wall Street's Growing Investor Impatience Clashes With Executive Timelines

A significant disconnect has emerged between what investors expect and what CEOs can deliver. While 53% of investors expect a return on investment (ROI) within six months or less, only 16% of large-cap CEOs surveyed believe they can deliver returns in that window 2

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. In fact, 84% of CEOs at companies with more than $10 billion in annual revenue predict that positive AI returns from new initiatives will take longer than six months to achieve 1

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"Investors, however, are becoming increasingly impatient for ROI on these AI investments, creating a tension that will be important to watch in the year ahead," said Ursula Burns, chairwoman of Teneo 2

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. This investors' expectations for faster ROI has already influenced market behavior, with recent reactions to tech company earnings and capital allocation decisions reflecting a preference for efficient spenders. Google's parent company Alphabet, which allocates about 25% of annual revenue to capex, has seen shares rise over 75% in the last six months, while Meta, spending closer to half its annual revenue, has stalled with a 5% decline 2

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Measuring AI ROI Remains a Complex Challenge

The difficulty in demonstrating clear revenue gains extends beyond simple financial metrics. Companies have deployed AI tools across customer service, IT, marketing, and human resources, but evidence of transformative operations or meaningful bottom-line improvements remains scarce 1

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. An MIT report from August found that fewer than one in ten AI pilot programs have produced real revenue gains, with just 5% of integrated AI pilots extracting millions in value while 95% of organizations see zero return 1

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Part of the challenge lies in defining what AI returns should look like. "We are changing how humans work. And so how do we measure this... this is a major change that we don't even have tools yet to answer all those questions," Kasia Wakarecy, vice president at Pythian, told Axios 2

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. Areas like security, legal, and HR are lagging behind marketing and customer service in demonstrating productivity gains 3

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AI Bubble Concerns Mount Amid Circular Investment Patterns

Fears of an AI bubble continue to intensify as analysts note the circular nature of major AI investments. Nvidia's $100 million investment in OpenAI, which then purchases Nvidia chips for data centers planned with Oracle, exemplifies this pattern 1

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. Compounding concerns, reports that Oracle is delaying some data center projects have heightened Wall Street anxiety by pushing tangible payoffs further into the future 1

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Despite the U.S. economy becoming increasingly dependent on AI, there is surprisingly little to show for these investments. AI companies continue to promise that more advanced models will unlock significant productivity gains and spark innovation, but concrete evidence remains elusive 1

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Positive Impact on Jobs Offers Silver Lining

Amid concerns about layoffs, the Teneo survey reveals that two-thirds of CEOs expect AI to increase entry-level hiring in 2026, while 58% anticipate growth in senior leadership roles 3

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. This suggests potential net job creation rather than widespread displacement. "It's not that AI is wiping out the workforce today - it's reshaping it," explained Ryan Cox, Teneo Global Head of AI 3

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New job titles like decision designer and AI experience officer are emerging, highlighting a shift toward human-AI collaboration. CEOs agree that AI is reconfiguring jobs by automating some tasks and creating new ones, rather than entirely eliminating human roles 3

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. The consistency in AI spending projections—a modest two percentage point increase from last year—comes as only 31% of CEOs expect global economic improvement in 2026, down from 51% last year, suggesting leaders are looking to regain control over their success through technology 3

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