Menlo Ventures enterprise AI spending report

Menlo Ventures' 2026 State of Enterprise AI report, based on a survey of nearly 400 U.S. enterprise decision-makers overseeing more than $4 billion in AI spending, finds enterprise AI spending reached $176.8 billion, up 5.4x from $33 billion the prior year. The report states autonomous agents transformed how businesses use and pay for AI. This is the fourth annual edition of the report. Frontier models now command 63% of enterprise AI spending, up from 35% in Q3 2025, with their token share rising from 18% to 42%. Smaller closed models dropped from 29% to 13% of spending share, and frontier lab share of deployment spend grew from 50% to 69%. Open-source models grew their token share from 11% to 19%, but their spending share fell from 6% to 4%, as average open-source model prices fell 3.3x to $0.13 per million tokens versus roughly $0.70 for closed models. Despite a 22.5x increase in open-source token usage, price deflation outpaced volume growth, causing open-source to lose spending share. Separately, Ollama CEO Jeffrey Morgan said open models now handle 80-90% of enterprise AI tokens, with Ollama Cloud seeing 150x growth in token usage since the start of 2026, driven by two adoption waves: coding agents in early 2026 and an agent expansion into finance, support, marketing, and sales in April 2026.