Enterprise AI Usage Survey 2024: Claude Doubles Market Share, RAG Becomes Standard, and Code Generation Goes Mainstream

Menlo surveyed 600 enterprise IT leaders and compiled a 2024 Generative AI Enterprise Usage Report.

This article takes the most interesting points from the report and shares them with you. From this, we can see that Claude is encroaching on OpenAI's turf, RAG has surpassed fine-tuning, and code generation is significantly ahead in terms of application scenarios.

Changing Market Landscape for Big Models

In the enterprise market, Anthropic is stealing OpenAI's turf.

OpenAI's market share has dropped from 50% to 34%.

Claude doubled its market share from 12% to 24%.

Meta follows with 16%, unchanged.

Google went from 7% to 12%.

Closed-source models remain dominant.

Closed source 81% of the market

19% open source

Enterprise AI Engineering Trends

RAG technology share exceeds 50% , becoming the de facto standard for enterprise applications.

Prompt engineering dropped from 55% to 16%, a steeper decline than expected.

Model fine-tuning, down from 19% to 9%, and the fine-tuning vs. RAG debate is essentially over.

Agents, from 0 to 12%, are great, finally being used, and the growth of airspace will get bigger and bigger in the future.

Enterprise Spending on AI Soars

Compared to last year, enterprise support for AI grew significantly, with the most notable increases coming from the base model and training deployment segments, which grew by 6.5x and 3.8x, respectively.

Most Valuable AI Scenarios

Code generation is a distant second, having broken the 50% cutoff. Representatives: GitHub Copilot, Cursor, Codeium, Windsurf.

Supportive chatbots are a close second at over 30%, and these products provide reliable, 24/7, knowledge-based support for internal employees and external customers. Representatives, Aisera, Decagon, Sierra

Enterprise Search, and Data Extraction + Conversion, at 27% and 28% respectively. Representative works, Glean and Sana

Conference summarization, 24% adoption, represented by Fireflies Otter

What Are the Main Elements Enterprises Consider When Using AI?

There are only two main concerns for organizations:

• A clear ROI return on investment

• Ability to customize to their industry

Only 1% of enterprises are concerned about price.

Simply put, organizations are more interested in measurable value than price.

That's why it's best to move from tool pricing to results-based pricing for AI tools.

Which sectors are adopting AI

Unsurprisingly, technology departments account for the largest share of spending, with IT (22%), product+engineering (19%), and data science (8%) combining to account for nearly half of all enterprise generative AI investments.

Some predictions

1. Agents will drive the next wave of enterprise transformation, represented by Clay and Forge.

2. New companies are beating the old, with Chegg losing 85% of its market capitalization, Stack Overflow traffic dropping 50%, and other established companies at risk of disruption.

3. The AI talent shortage has intensified and shows no signs of easing.