A wave of expert commentary following Q1 2026 earnings season warns that British firms are continuing to dramatically increase AI budgets despite an inability to demonstrate measurable return on investment.
'That shouldn't translate into investing in AI blindly, without a clear strategy,' one prominent analyst told TechRadar.
The pattern mirrors historical enterprise software buying cycles — investment races ahead of measurable value, often by years. The question is whether this time is genuinely different, or whether the AI bill is coming due.
A survey of FTSE 250 companies found that 84% increased their AI budgets in Q1 2026, with a median increase of 42%. However, only 18% could point to specific, measurable revenue gains attributable to AI.
The disconnect between spending and returns is causing tension in boardrooms. CFOs are increasingly asking for AI ROI metrics, while CIOs argue that the technology requires a longer investment horizon.
Some analysts are drawing parallels to the dot-com era, where massive investment in internet infrastructure preceded years of losses before eventually generating extraordinary returns. The question is which AI investments will prove to be Amazon (transformative) and which will be Pets.com (wasteful).