Your AI Budget Is Being Measured Against The Wrong Number

Shweta Gummidipudi, Chief Information Officer at Twilio.

​I get asked some version of this question that most CIOs get asked: Are our AI costs justifying the ROI? Like most of my peers, I’ve spent all year grappling with that question because it rests on a comparison that doesn’t exist yet.

Think about how we got comfortable with cloud spend. It took years, but the industry eventually produced something a finance team could work with. You could look at infrastructure cost as a percentage of revenue, compare it against companies of similar shape and form a reasonable view. That figure was never precise, but it didn’t need to be. It gave two people in a budget conversation a shared reference point.

AI has no equivalent. We’re three years into meaningful enterprise adoption with no credible answer to what a company of a given size should be spending. Every budget conversation right now is a negotiation without a yardstick. That usually means the loudest opinion in the room wins.

The closest thing to a benchmark is descriptive rather than prescriptive. Boston Consulting Group’s January 2026 report found that technology companies planned to increase AI spending to around 2.1% of revenue. That tells you what companies are doing but says nothing about whether they’re right. Given that a 2026 Gartner Inc. report highlighted that 59% of AI initiatives never reach production, averaging the behavior of a group still mostly experimenting is a strange thing to anchor to.

The deeper problem is that revenue is the wrong denominator entirely.

What determines whether a dollar of AI spend produces anything is operating maturity; that’s what we should be benchmarking against. There’s no published benchmark for what each stage should spend, which is part of the problem. Let me sketch one anyway because the shape is more instructive than any single number. If the tech sector average sits somewhere around 2% of revenue, here’s roughly how I would expect maturity to spread it.