Will Corporate America’s AI adoption justify the massive capital spending?

We don’t seem to live in a world where AI capex for capex’s sake is rewarded by investors anymore. Investors likely need to see increasing downstream adoption, that is, AI being used more and more in the field.One problem with this is that surveys on Corporate America’s utilization of AI are all over the map; I’ve seen some in the low double digits and others in the neighborhood of 60% or more.AI capex is both offensive — a bid to create new revenue streams and enable products that don’t exist — but also defensive, made by tech behemoths trying to ensure their existing dominant positions don’t get swept away by the tide of this new technology.In many cases, Fortune 500 companies that want to implement — or, at least, dip their toe in the AI waters — don’t have a pre-established strategy or plan of action to do so. They need outside help for that.Some good proxies for Corporate America’s willingness to spend on AI, therefore, can be found through consulting giant Accenture’s new bookings as well as IBM’s generative AI book of business.Accenture is in the business of helping companies “reinvent” themselves — a process that the consulting giant itself has had to undergo in light of how the industry has been rattled by the emergence of AI. And to do that, it’s turned to… AI, overhauling its work force, striking partnerships with OpenAI, Anthropic, Snowflake, and Palantir, and also buying a majority stake in DLB Associates, an AI data center engineering and consulting firm.“We are expanding in these partnerships because of what we see in client demand,” said CEO Julie Sweet during Accenture’s December 18 earnings call. “We really try to be number one with all of the partners so that we can help our clients integrate and use these new technologies with their existing ecosystem, which is absolutely critical to them.”Annoyingly, Accenture has decided that it won’t be breaking out AI-specific financial performance going forward, but that’s also a signal of how much management thinks this is integral to its overall growth.And for IBM, AI-related consulting feeds through to other parts of its business, as its AI book of business also includes associated software revenues.“Definitely the AI piece is a strong contributor to the software growth and I believe it's a big piece of why Consulting is beginning to return to growth because we called the play to move towards AI almost two years ago,” said IBM CEO Arvind Krishna on the company’s most recent earnings call.