Tim Tully & Joff Redfern & Deedy Das & Derek Xiao — Menlo Ventures - 2025: The State of Generative AI in the Enterprise featuring Departmental AI, Vertical AI, Modern AI Stack Market Maps - December 2

Free

Enterprise generative AI market data, insights, and market maps for 2025

FreeFree tier

Type

Open Source

Company

Menlo Ventures

Visit Website GitHub (38 stars)

About Tim Tully & Joff Redfern & Deedy Das & Derek Xiao — Menlo Ventures - 2025: The State of Generative AI in the Enterprise featuring Departmental AI, Vertical AI, Modern AI Stack Market Maps - December 2

The 2025 State of Generative AI in the Enterprise report by Menlo Ventures provides a comprehensive analysis of generative AI adoption, market spending, and investment trends across U.S. enterprises. Based on a survey of ~500 enterprise decision-makers and a bottoms-up market model, the report reveals that enterprise AI spending surged from $1.7B in 2023 to $37B in 2025, with over half allocated to AI applications. It covers key patterns in how AI enters the enterprise (buy vs. build, product-led growth), market maps for departmental AI, vertical AI, and the modern AI stack, and insights into the boom vs. bubble debate. Authored by Tim Tully, Joff Redfern, Deedy Das, and Derek Xiao, the report offers a multi-year view of AI's transformation from early experiments to broad deployment.

Key Features

Comprehensive market sizing: enterprise AI spend reached $37B in 2025 (3.2x YoY increase)

Survey data from ~500 U.S. enterprise decision-makers

Analysis of buy vs. build trends: 76% of AI use cases are purchased, up from 53% in 2024

Market maps for departmental AI, vertical AI, and the modern AI stack

Identification of 10+ products with over $1B ARR and 50+ products with over $100M ARR

Insights into the AI boom vs. bubble debate with supporting demand-side data

Path to production patterns: product-led growth, enterprise buying behavior

Pros & Cons

Pros

Provides concrete market data and spending figures ($37B in 2025) to support strategic decisions
Based on a large survey of enterprise decision-makers (n~500), offering credible insights
Covers both application layer and infrastructure, giving a holistic view of the AI market
Includes actionable market maps for departmental AI and vertical AI, useful for product and investment strategy
Free and openly accessible (open source) report from a reputable venture capital firm

Cons

Report is a static snapshot as of December 2025; dynamic updates not provided
Focus is solely on U.S. enterprises, limiting global applicability
Does not include primary data on specific vendor performance or detailed technical benchmarks
May reflect the perspective of a single venture capital firm, potentially introducing bias toward Menlo portfolio companies

Best For

Understanding the current state and trajectory of generative AI in the enterpriseBenchmarking AI spending and adoption against industry averagesIdentifying investment opportunities in AI applications, infrastructure, and vertical solutionsGuiding enterprise AI strategy and purchasing decisionsResearching market dynamics and competitive landscape in generative AI

FAQ

What is the total enterprise AI spending in 2025 according to the report?

The report states that companies spent $37 billion on generative AI in 2025, up from $11.5 billion in 2024, a 3.2x year-over-year increase.

What percentage of AI use cases are purchased vs. built internally?

In 2025, 76% of AI use cases are purchased by enterprises, compared to 53% in 2024, indicating a strong shift toward buying rather than building.

Who authored the report?

The report was authored by Tim Tully, Joff Redfern, Deedy Das, and Derek Xiao from Menlo Ventures.

Is the report free to access?

Yes, the report is freely available on Menlo Ventures' website with no payment required.