Pedaling AI software isn’t as easy as it used to be

Subscribe to enjoy similar stories. The golden age of unbridled spending on AI software might be behind us, as vendors say it’s a lot harder to make a sale than it used to be. Last year represented something of a boon era for vendors pedaling AI apps.

Spurred by board-level mandates, corporate FOMO and an aggressive campaign from tech giants about the world-changing capabilities of AI agents, enterprises were spending willingly and wildly—an estimated total of more than $1.249 trillion in software, according to research and advisory firm Gartner. Alex Levin, co-founder and chief executive of AI-powered customer service startup Regal, said until recently he could make an enterprise sale with a single demo—a phenomenon he called “shocking," given how big companies can sometimes take one to two years to make a purchase. Last year, Levin said he was closing deals in as little as 60 or 90 days.

That isn’t the case anymore. Vendors say big companies have become more cautious about what they buy. They’re taking longer to evaluate solutions, involving more internal stakeholders from legal and finance teams, and placing more emphasis on the kind of financial returns they might get out of the investment.

The breakneck pace of AI innovation—like recent updates around Anthropic’s Claude—is also making potential customers wary of sales commitments. “There was a period where the early adopters were moving very fast on really interesting technology and that piece has slowed down," Levin said. The typical time for completing a sale is now about six months, he said.