AI Spending 2026: Time to Scale Up or Pull Back?
JR
As we approach the end of the year, it’s natural to look back at our goals year-to-date and start looking forward to the opportunities of 2026. Strategic planning is in full swing, and the number one topic business leaders are bringing to me right now is AI spend.
Everyone is trying to answer the same question: Are we spending too much? Too little? And what exactly should we budget for next year?
Whether you are looking to ramp up or pull back, the answer lies in right-sizing your spend to your actual business results. Here is the framework I use to determine where your budget should go in 2026.
1. Account for the "Hidden" Labor
When calculating your AI spend, it is easy to tally up subscriptions, inference costs, and cloud solutions. But the most significant cost is often the one that gets "lost in the sauce"—your internal labor.
You must account for the time your employees spend implementing, testing, and managing these tools. Even if it is just an estimate, understanding this hidden cost is vital to seeing if your strategy is actually profitable or just a drain on resources.
2. The 6-Month Reality Check
We have written before about Why 95% of AI Pilots Fail, and often it comes down to timeline drift.
If you have a project that has been running for nine or twelve months without returning demonstrable value, it is time to revisit it. In our view, projects should start returning value in no more than six months. If you are past that mark and still in the "testing" phase, your scope might be too broad, or the project may be flailing. It’s time to reassess.
3. The Adoption Benchmark (The Rule of 70)
If you’ve read our post on The Rule of 70, you know that deployment does not equal success—usage does.
You need to get a handle on how widely your deployed tools are actually being used. Good tools that genuinely make lives easier should see 70% adoption very quickly. If you aren’t seeing those rates, you have a problem. High spend with low adoption is a clear signal to pause and investigate before committing more budget.
4. Micro vs. Macro Results
Finally, connect your spend to results on two levels:
- Micro Results: Look at your automations. How frequently are they running? What specific processes are they replacing? This tells you your efficiency savings.
- Macro Results: Step back and look at headcount and revenue. Are you growing revenue while keeping headcount static? Are you growing faster this year than last?.
The Verdict: Reinvest or Reset?
Once you have calculated the total cost (including that hidden labor) and compared it to your ROI, your 2026 strategy should fall into one of two buckets:
- The Scale Strategy: If you see a massive ROI and tight automations, take those savings and reinvest. 2026 is the year to double down on what works.
- The Pause Strategy: If you have high spend but struggle to connect it to value, pull back. Do not throw good money after bad. Stop, measure the results, and refine your approach before spending another dollar.
Let’s Make 2026 Your Most Profitable Year
If you need a sounding board to review your 2025 automation strategy or help building your roadmap for 2026, reach out to us.
We are happy to sit down for a free consultation to help you understand what a right-sized AI strategy looks like for your specific business. Let’s make sure 2026 is your most productive year yet.