An early read on your 2027 AI budget

Enterprise AI budgets are likely to tighten and be scrutinized amid concerns about returns and value. In addition, cybersecurity has taken back some of the AI budget even if it's still labeled AI.

Those were some of the takeaways from Constellation Research's Chief Distiller Esteban Kolsky at Connected Enterprise 2026. A few themes to watch as the budget wrangling has already begun.

• AI budget pushback started in October 2025 and then the tokenmaxxing fad pushed enterprises to better control funding.
• The AI budget is being funneled to cybersecurity. This point is nuanced given that "a lot of the AI budget is being shifted to cybersecurity still with the label of AI," said Kolsky.
• Global shocks kept derailing plans to invest.

A show of hands at CCE 2026 illustrated how the tech budget is going up, but AI isn't taking priority over everything else like it did in 2024 and 2025.

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Now what?

Kolsky said enterprises need to invest in six areas: Business value, data readiness, infrastructure readiness, governance, economics and talent.

Business value. Kolsky said CxOs need to drop the fascination with returns on investment. "If you are looking for ROI in AI, you're never going to find it," said Kolsky, who noted that value follows a J-curve and shows up around year two or three. "You're going to make an investment for five to 10 years."

Data readiness. Agents need to get the data they need and enterprises need to prod openness among vendors. "Some vendors are actually restricting the access to the data of agents," said Kolsky.

Infrastructure will take most of your budget. Infrastructure will fall under cloud, on-premises and all of those systems you've neglected since the Covid-19 pandemic.

Governance is all talk so far. "Nobody's doing it. We're talking about it," said Kolsky.

Token- and outcome-based pricing won't work. "No CFO is going to buy into tokens or outcome-driven consumption," said Kolsky.

Talent matters, but is neglected

Kolsky said talent matters and it's the most neglected budget category.

Here's why it makes sense to focus on talent:

• People handle the exceptions that agents can't. "The only way you can handle exceptions is with experienced operators that know what they're doing," said Kolsky.
• Layoffs are throwing away company knowledge. Kolsky said enterprises have been "laying off the knowledge of the company" that will be needed to build models.
• Training on prompts isn't a talent strategy.