Economic uncertainties stall AI investment growth among companies

In early May 2025, Gary Cohn, an executive at IBM, emphasized the current economic uncertainties impacting business investment decisions, particularly regarding artificial intelligence (AI). Speaking at the Milken Institute conference in Los Angeles, he pointed out that many companies are adopting a cautious 'wait-and-see' approach due to trade policies and relationships with major partners such as China, Canada, Mexico, the EU, and Japan. The uncertainty stems from ongoing discussions about tariffs and the potential inflationary cycle in the U.S., which are creating hesitation among business leaders. Cohn remarked that there is a notable shift in companies’ perspectives on AI adoption. While previously CEOs were uncertain about its applications, many now recognize AI not only as a tool for cost savings but also as a means to enable business growth. Despite this optimism, Cohn highlighted that investment rates are stagnating. He expressed concern that few companies are increasing their spending compared to the previous year, which limits the potential for growth in AI sectors. In his observations, Cohn mentioned that business leaders are thoroughly assessing their operational strategies and weighing the implications of economic conditions on their investments. He noted that, while there is a strong belief in the return on investment in AI technologies, companies are exercising caution, opting not to over-invest or under-invest during this uncertain period. The optimism among CEOs about AI returns, with 85% confident about future benefits by 2027, contrasts sharply with the current funding landscape. Many businesses are delaying substantial investments until there is clarity on international trade relationships and the overall economic environment. Cohn's insights reflect a broader sentiment among business leaders who require more predictable conditions to confidently commit to long-term investments in innovative technologies like AI.