How Top Performing Companies Handle Tech Investment – Forbes
andCIO
ByMegan Poinski,
Forbes Staff
andCIO,
Forbes Staff.
An overwhelming majority of companies are planning to increase their investment in tech this year. A new study from Forbes Research shows 99% are spending more, with more than half boosting the amount 10% or more above what was spent in 2024. While the largest area for additional spending—42%—is AI and machine learning, that’s not the only major priority. The study found 36% are spending more on cybersecurity, nearly a third are increasing their budget for database and data management, and big data and analytics, as well as cloud computing, are getting a spending boost from more than a quarter of companies.
As enterprise technology becomes more integral to everything a company does, directing this spending is no longer strictly the purview of the CIO. Companies say 59% of acquisitions are led by IT departments, while 41% are headed up by other dedicated lines of business. But in three years, that balance is expected to flip, with IT leading just 47% and the majority in the hands of different departments. This is keeping with the trend that the end users in different departments are getting more say in purchasing systems that meet their specific needs.
As tech spending strategies evolve, the study found that there are common traits for the highest performers who achieved at least 5% year-over-year growth. These companies tend to be more streamlined and less regimented throughout the procurement process. More than half said their C-suite executives took an early lead in research, but then 76% stepped back as the contract was completed—ensuring the department that ultimately uses the system approves. They buy tech more incrementally, making smaller purchases outside of a rigid cycle and being able to move quickly on emerging technology, and are more willing to partner with startups. These companies also have far fewer challenges on their technology roadmap, receiving financial support, and having leadership buy-in for this strategy.
It’s spring break season and we’ll be taking next week off from Forbes CIO. We’ll be back on Thursday, April 24.
President Donald Trump holds up a chart of "reciprocal tariffs" at his trade announcement event last week.
Just over 12 hours after sweeping tariffs on almost every U.S. trading partner took effect, President Donald Trump instituted a 90-day pause on most of the new import taxes Wednesday afternoon. And while previously falling markets quickly recovered, the tariff threat still looms on the horizon, poised to go into effect this summer. But no matter when tariffs start getting collected, Forbes’ Richard Nieva and Rashi Shrivastava write, they could handicap the U.S.’s lead in the race to develop the most sophisticated and advanced AI systems. As initially written, the tariffs excluded semiconductors, but not the infrastructure needed to advance the industry. AI needs more power-hungry data centers to provide the operations behind the platforms, and the majority of the commodities used to build them would be subject to tariffs. Matt Mittelsteadt, a technology fellow at the Cato Institute, said the steel, aluminum and power transformers to build them are often imported—but even if they’re purchased domestically, their prices are subject to spike.
Data center consultant Daniel Golding said that the U.S. had previously been thought of as one of the cheapest places in the world to build a data center, but Trump’s economic policies are endangering that competitive advantage. “AI is not something that is massively profitable so far,” he said. “So the question is: Is this going to put sort of a damper on these AI bills that don’t yet have an amazing ROI?”
Before pausing the tariffs, Trump signed executive orders aimed at easing one of the issues with AI data centers: the increased need for electricity. The orders are aimed at revitalizing America’s “beautiful clean coal industry,” and would relax regulatory barriers and environmental restrictions on coal facilities. For AI, Trump said, the U.S. needs “more than double” the electricity it produces now. Recent administrations have been moving away from coal energy because of its environmental issues, both producing high levels of carbon dioxide emissions when burned and creating other issues near power plants. Coal energy capacity in the U.S. has fallen sharply in recent decades.
Photo Illustration by Jonathan Raa/NurPhoto via Getty Images
Adobe has always prioritized human creativity with its products, but a blog post from Adobe Digital Media CTO Ely Greenfield says the company recognizes that AI agents can empower that creativity and improve human potential. In the post, Adobe runs down its vision for AI agents to assist on many of its popular platforms, writes Forbes senior contributor Mark Sparrow. Adobe Acrobat agents to help analyze documents and answer questions will soon be able to be customized. Agents for Adobe Express will be able to improve upon existing designs, potentially creating several options from pre-approved design elements. Agents for Creative Cloud and Photoshop will be able to perform mundane tasks to change, improve and work with content. And agents currently under development for Premiere Pro will be able to understand the media being worked with, and could be instructed to develop a rough cut from raw video. “While AI can’t replace human creative inspiration, with your input it can make some educated guesses to help you get your project off the ground,” Greenfield’s post says.
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While there are some bills pending in Congress intended to tackle the problem of foreign pirated websites, digital rights group the Electronic Frontier Foundation says the proposed solutions are overbroad and it is working to rally opposition, writes Forbes senior contributor Emma Woollacott. The bills, one that has been proposed by Rep. Zoe Lofgren (D-Calif.) and one still being drafted by Rep. Darrell Issa (R-Calif.), have similar aims: Arming rights holders to use court orders that would force ISPs and DNS providers to block foreign websites violating U.S. copyright laws. EFF Senior Policy Analyst Joe Mullin told Woollacott that because many websites today are hosted on cloud infrastructure or use shared IP addresses, blocking one target site could inadvertently stop thousands of unrelated ones. Mullin described the legislation as an “internet kill switch.” Meanwhile, the perpetrators can easily recreate the site on another host. Woollacott points out this legislation is similar to bills from the early 2010s that had similar aims, but were roundly protested and abandoned.
Illustration by Grabriel Grabriel Garble for Forbes
For the seventh consecutive year, Forbes has named the AI 50: the 50 most promising private companies that are using AI to solve real-world problems. A total of 1,861 companies were nominated. They were judged by company-submitted and publicly available data in three core areas: financial strength, organizational culture and diversity. The finalists were reviewed by expert judges with background in academia, research and technology, and the final list was curated by Forbes editors.
This year’s list includes some of the giants in private company AI development—including OpenAI, Anthropic, Perplexity and xAI—as well as open-source platform HuggingFace. But it also features some smaller players, including Crusoe Energy, the tiny startup building OpenAI and Oracle’s $500 billion “Project Stargate,” which started quickly building AI datacenters in Iceland in 2023.
Writer, an AI tool suite designed to expedite many necessary—and often tedious—corporate tasks, also was recognized. The company, founded by CEO May Habib and Waseem Alshikh, features no-code agents to do these tasks that bring clients quick ROI. Writer has a retention rate of 160%, meaning that existing customers expand their contracts by an average of 60%.
And some of the recipients are on the list solely by their reputation. Former OpenAI CTO Mira Murati’s Thinking Machine Labs has yet to release anything, won’t say what they are working on, and has yet to actually raise money. But Murati’s reputation is leading many to see Thinking Machine Labs as a heavyweight in waiting. The company is said to be planning a $1 billion funding raise, valuing the company at about $9 billion.
Satellite internet from Starlink is the largest revenue driver for Elon Musk’s space exploration company SpaceX, but Forbes’ Jeremy Bogaisky writes technical and political difficulties could send that money back down to Earth.
$350 billion: Valuation of SpaceX in December, following a sale of insider shares. It’s the world’s most valuable private company
$30 billion: What Musk said was the maximum annual business opportunity for Starlink at a satellite conference in 2020
‘Not consistent with what are the technical realities’: How Pierre Lionnet, an economist with trade association Eurospace, described high valuations for SpaceX
Even though Trump is pausing most tariffs for 90 days, it’s causing a lot of uncertainty for companies’ tech budgets. Here are some things to do over the next three months to prepare for what comes next.
AI agents are changing how businesses can complete tasks, but if targeted by cybercriminals, they can also be security risks. Here are five ways to add some protection to the agents your company develops and uses.
A new feature has been spotted in a coming WhatsApp update. What will it do?
A. Create animated avatars that automatically react to messages in a chat
B. Disable the ability for a chat to be exported or saved
C. Automatically translate messages typed in other languages
D. Add video chat
See if you got the answer right here.
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