Given the rise in curiosity about the use of artificial intelligence (AI) in both our personal and business lives, the NCMM started collecting data from middle market companies in the June 2023 MMI survey. While scratching the surface on this topic, we saw some interesting trends and wanted to dive a bit deeper for the year-end report.
Adoption of AI by middle market companies continues to be slow and cautious. The percentage of companies telling us they are already using or actively testing AI for their company went from 30% at mid-year to 34% at year-end, not a huge leap. Most of the companies driving this early adoption are in the upper middle market with revenues of $100 million or more annually. Similarly, the most essential elements of AI remain the same with a focus on cost, business use case and data security being key considerations.
We were able to learn that AI adopters are not only growing faster, but generally are better equipped across the broader spectrum of technology implementation. This includes strategic planning, capital investment, talent and expansionary mindset. AI is currently being used in a variety of functions including data analytics, customer engagement and corporate communications. The companies that are still only learning and exploring AI are more likely to be on the lower end of the middle market, be less aggressive with capital spend on the business and find many aspects of managing risk challenging.
Wherever middle market companies currently fall on the AI spectrum, it is important to note that 80% of middle market companies plan to incorporate AI in the future. Primary goals include improving efficiency, driving higher levels of customer service, collecting/analyzing data and supporting innovation.