AI adoption looks broad but is shallow, with power users far ahead

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 18:21

   And there's a bunch of metrics in here that I think elucidate that. One is, you know, if you think about live deployments at S&P 500 companies, that's at 69 percent. So, you know, if you're AI pilled, as we all are, maybe something closer to what we would all expect. But then if you move toward quantifiable impact, which is probably a good metric of how far along they are in their deployment, that's 30 percent.

2. 18:44

   Now, if you go to the ultimate barometer, which is a metric tracked over time, that's actually only at 2 percent. So we believe that AI is delivering results, but there is a huge amount of room to actually deepen its use inside the organization and track those results over time. And so moving from these individual deployments that you're seeing to really deeply influential recurring workflows is the next stage, frankly.

3. 19:10

   And I would just say that most of the enterprises that we speak with anecdotally, their exposure to AI is still mostly with Microsoft Copilot, which just shows you how far they have to go. Yeah, this gap between what the models can do and how they're being used is what makes me so excited about the application. Sarah, you did this great, you know, conversation with Ali Godzi at Databricks with Martine, and he talked about how, you know, the AI can know a lot about the world, but know very little about your company. And we're seeing this in our application layer companies where they're bridging this gap.

4. 19:45

   And like one example that has stuck out to me over the last few months is if you were to take Revolut, who has a really sophisticated engineering team, they still had to partner with Eleven Labs and take Eleven's, you know, best-in-class voice model and harness it to connect securely with customer accounts and banking workflows so that when I, as a customer, call, I can have my, you know, problem resolved smoothly, efficiently, and, you know, securely.

5. 20:13

   Absolutely. Today's opportunity is so much around taking these capabilities and harnessing them to build reliable services. So in addition to the fact that enterprise adoption is still quite early for AI, the other really remarkable trend that we wanted to put some stats to is just that the power users are totally pulling away. So you can think of AI spending rising generally across companies, but the power users, as we talked about, the most intensive users, are spending much, much more.

6. 20:50

   So we looked at some YIPIT data for this, and if you look at sort of median AI vendor spending in the top 1%, that's roughly eight times the level of the top 10%. What's impressive about that is it's almost as much as the 2% to 10% combined is basically the 1%. Yeah. But just, you got these power users that are clearly early adopters. Yeah, absolutely. And I mean, anecdotally, even inside our own portfolio companies, which you could say are pretty much fully AI native or AI pilled, you're seeing the top users spend anywhere from, call it, $7,500 to $9,000 a month.

7. 21:26

   And the median users, again, for the most AI native companies, probably closer to the cost of like a monthly subscription of, you know, $200, maybe you're stacking two subscriptions on top. So $200 to $400. So over 20 times the spend, if you think about median versus sort of top users. Yeah, you know, we talked to our own portfolio companies and, you know, one of the questions that we discuss is like, you know, how much adoption do they have and how do you measure that?

8. 21:52

   And, you know, if you just look at like the percentage of money that they're spending on AI tools compared to headcount, as an example, you know, I think like relatively forward-leaning, large Fortune 500 type companies are probably today at like 1%. And, you know, the most forward-leaning, you know, AI-pilled companies in our portfolio can be as high as like 10%. And so all of these are just questions of like, how early are we into diffusion and how deep will that diffusion go?

9. 22:22

   Yeah, another example we've seen within our portfolio, you know, many enterprises are really excited when they, you know, buy Cursor or Cognition for the first time.