Fears of an impending artificial intelligence bubble aren’t yet preventing mid-market business leaders from pouring money into the nascent technology.
That’s one of the findings of a recently released survey conducted by tax and advisory firm Baker Tilly. In early October, the company queried 500 chief executives and owners of companies with annual revenue ranging from $200 million to $2 billion about their concerns and investment priorities going into the new year.
Spending on artificial intelligence in respondents’ current fiscal year ranged from $500,000 all the way up to $1 million, averaging more than $600,000, according to Baker Tilly. About a fifth of respondents (21%) said they’re investing between $700,000 and $800,000 on the technology.
Notably, though, the company’s survey didn’t ask respondents to specify what types of AI technology they’re investing in. The term, breathlessly thrown around in business circles these days, can refer to a range of automation tools, ranging from simple accounts receivable software to chatbots and so-called agentic models that can make decisions on their own.
“AI is, in a way, something different for every company,” said Mark Steranka, consulting managing principal at Baker Tilly, in a Friday interview. The bigger question, he said, is attempting to understand how businesses are using the “many things that fall under the AI banner.”
To that end, Baker Tilly’s survey found that 76% of respondents said they’re investing in artificial intelligence in a bid to “improve efficiency and automate work for employees/clients.” Sixty-two percent said they’re investing in the technology to attract talent, while 57% said they’re doing so to “analyze data silos for better insights.”
The survey also asked respondents what was preventing them from using AI. Out of all 500 respondents, that question garnered only six total responses, indicating that, regardless of investment level, all of the participants are at least thinking about the technology.
It bears noting, of course, that many of the lofty claims by AI evangelists have yet to fully materialize. MIT’s much-cited study over the summer pointed out that 95% of generative AI pilots have failed to accelerate revenue as promised. Plus, some investors have grown concerned about what appear to be increasingly circular deals among the biggest AI players today.
Meanwhile, technology adoption at large, tariffs and tax or regulatory changes ranked as the top three biggest concerns among respondents in Baker Tilly’s survey. When it comes to business risks, 55% of respondents cited the general “economic environment,” while 52% cited cyber threats. Regulatory and legislative changes weren’t far behind, selected by 49% of respondents among their business risks.
Respondents largely said they’re taking steps to address some of these challenges. For instance, 80% of participants said they either have made or are considering making supply chain changes due to “tariffs or increased regulatory pressure.” Steranka described this set of respondents as “bullish, but not sitting still.”
Respondents in Baker Tilly’s survey heavily skewed toward millennials, who comprised 79% of participants. Gen Xers represented 15% of respondents, while Baby Boomers made up just 1%.
“We have relatively young leadership in the middle market, and they’re quite forward-looking and proactive,” Steranka said. “That’s very encouraging, thinking about the health of the middle market.”
