PwC Finds AI ROI Jumps When Companies Cross Spend Threshold

The Common Question

How do I know if my company is spending enough on AI to see real returns?

The Lesson in This Case

Only one in four organizations has a clear process to evaluate AI success, and PwC's research shows ROI stays negligible until AI spending crosses roughly 1.6% of revenue – above that threshold, EBITDA rises 9.5% and total shareholder return climbs 20.2%. The gap between those two data points explains why most AI budgets feel like money going into a black hole: organizations measure activity instead of outcomes, and they omit full cost inputs like infrastructure, labor, model fees, and token costs from their ROI calculations. Senior leaders who want to close that gap should build a portfolio assessment framework that pairs every cost line with a corresponding business outcome – productivity, revenue, or risk reduction – before another dollar gets approved.

Originally reported by CIO. Read the full story here.