AI Adoption and Predictions for Enterprise Tech Innovations in 2025

The excitement around AI adoption continues to swell, with many experts likening its impact to that of the industrial revolution. Yet, enterprises, which represent a substantial part of AI’s potential market, have been slower to embrace this transformative technology than what many anticipated.

As we move into 2025, many investors had predicted a surge in AI adoption among enterprises for 2024. Unfortunately, budget limitations and the experimental nature of many AI tools hindered broader implementation. So, how does the tech landscape look now as we approach 2025? Insights from various experts provide varied interpretations.

TechCrunch spoke to 20 venture capitalists who are active in funding startups focusing on enterprise technology. They shared their observations on enterprise budgets, upcoming trends, and strategies for securing Series A funding in 2025. Here’s an overview of their predictions.

Key Trends Influencing AI Adoption in 2025

SC Moatti, managing partner at Mighty Capital: One major trend I’m monitoring is the dependency of AI adoption on data quality. As enterprises move from trialing AI to implementing it on a grand scale, the demand for top-notch data will rise significantly.

Aaron Jacobson, partner at NEA: The underestimated role of coding agents in modernizing application development is worth noting. I foresee AI playing a pivotal role in transitioning mainframe applications to the cloud and refreshing legacy code.

Molly Alter, partner at Northzone: I’m particularly interested in sectors that have been overlooked by venture funds primarily due to costs. Thanks to AI, disciplines like accounting and legal services now stand to benefit from cost-effective software solutions.

Marell Evans, founder and general partner at Exceptional Capital: Gaining insight into enterprise sales cycles is key. I want to discern how long organizations typically test tools before making adoption choices, and how AI pricing models compare to traditional SaaS frameworks.

Mike Hayes, managing director at Insight Partners: One metric to monitor closely in 2025 is Time-to-First-Value (TTFV). This metric signifies the ease of deployment, implying that solutions with quicker TTFV could gain a competitive edge.

Identifying Investment Opportunities in 2025

Liran Grinberg, co-founder and managing partner at Team8: I am concentrating on enterprise resilience, particularly regarding operational failures and cybersecurity threats. Events like the CrowdStrike software update incident highlight how fragile our digital ecosystem can be.

Jonathan Lehr, co-founder and general partner at Work-Bench: We are investigating investments in data sovereignty, driven by regulatory requirements and geopolitical concerns. Organizations that provide companies total control over their data governance will be increasingly vital.

Mark Rostick, vice president and senior managing director at Intel Capital: My focus lies in task-specific AI models. While foundational models matter, those thriving in specialized functions—especially when utilized alongside agents—are particularly captivating.

Mike Hayes, managing director at Insight Partners: The shift is towards tech that not only boosts enterprise value but also minimizes friction. I’m on the lookout for solutions that confront distinct challenges and reengineer workflows using Generative AI or automated security innovations.

Jason Mendel, venture investor at Battery Ventures: I am interested in the application of AI in observability, IT service management, sales engagement, and cybersecurity. These domains hold major potential for value creation.

Ed Sim, founder and general partner at Boldstart Ventures: As we plan ahead, it’s crucial to think about the necessary infrastructure to support a future where multiple digital agents dominate. Who will provide the security frameworks, access management, and interoperability for these agents?

New Technologies Beyond AI Adoption

Liran Grinberg, co-founder and managing partner at Team8: The future of quantum computing intrigues me, especially as cyber threats evolve. Securing our digital infrastructure will demand innovative approaches.

Nina Achadjian, partner at Index Ventures: There’s renewed energy in fintech, SaaS, and e-commerce. With increasing regulatory scrutiny, cybersecurity will stay highly relevant, particularly as more IPOs surface.

Aaron Jacobson, partner at NEA: Although there’s significant buzz around securing AI, a greater chance lies in aiding enterprises to effectively implement basic cybersecurity practices.

Molly Alter, partner at Northzone: Companies focusing on public sector demands are definitely worth our attention. Government backing for tech modernization has created myriad opportunities for startups.

Andrew Ferguson, vice president at Databricks Ventures: There’s vast potential in collaborating with system integrators, who play a crucial role in translating enterprises’ data strategies into practical actions.

Janelle Teng, vice president at Bessemer Venture Partners: The evolution of data infrastructure towards lakehouse architecture highlights an urgent requirement for agile solutions.

Raviraj Jain, partner at Lightspeed Venture Partners: The energy sector is primed for expansion as data centers increasingly consume energy, signaling possible investments in nuclear energy solutions.

Building an AI Moat

Cathy Gao, partner at Sapphire Ventures: I utilize a “5D framework” that encompasses design, data, domain expertise, distribution, and dynamism when evaluating AI application companies.

SC Moatti, managing partner at Mighty Capital: A strong AI moat consists of proprietary data, advanced algorithms, and a scalable infrastructure to deliver unique solutions.

Scott Beechuk, partner at Norwest Venture Partners: Organizations building specialized datasets for particular verticals will have notable long-term potential, enabling unique model training and innovation.

Jonathan Lehr, co-founder and general partner at Work-Bench: Our focus is on vertical AI endeavors that demand in-depth expertise, granting access to previously inaccessible data.

Raviraj Jain, partner at Lightspeed Venture Partners: A key question is whether a company’s position improves or declines as models advance and evolve.

Securing Series A Funding in 2025

Liran Grinberg, co-founder and managing partner at Team8: A startup can obtain a Series A funding round of $15 million to $25 million with relatively small annual recurring revenue, as long as founder-market fit is robust.

Molly Alter, partner at Northzone: Enterprises that succeed will showcase considerable year-over-year growth and maintain a clear differentiation strategy to stand out.

Kirby Winfield, founding general partner at Ascend: Hitting $1 million in sales in the first two quarters is crucial, paired with an exceptional team and a unique solution targeting a broad market.

Andrew Ferguson, vice president at Databricks Ventures: AI-related startups should have a stellar tech team and show early traction in the $2 million to $5 million ARR range to meet Series A criteria.

Jonathan Lehr, co-founder and general partner at Work-Bench: Current estimates indicate that a $1.5 million threshold will be necessary for startups, with expectations for a 3x growth trajectory leading to a solid Series A opportunity.

Jason Mendel, venture investor at Battery Ventures: Startups confronting real pains in substantial markets, where urgency exists, will be duly positioned for Series A success.

Future Enterprise Tech Budgets and AI Adoption

Aaron Jacobson, partner at NEA: We will see a budget shift toward advanced digital workers in AI, moving beyond basic chatbots that can substantially impact businesses.

Scott Beechuk, partner at Norwest Venture Partners: Tech budgets will increase in 2025 as organizations seek a balance between consolidation and enhancing growth through AI systems.

Kathleen Estreich, partner at Pear VC: While the first half of 2024 could maintain consistent budget allocations, the latter half may exhibit increases with favorable economic conditions.

Kirby Winfield, founding general partner at Ascend: More organizations will not only allocate budgets for AI but will also strategize around pricing and ensuring data security.

Susan Liu, partner at Uncork Capital: Enterprises are likely to stabilize budgets initially before ramping them up as their financial health improves in 2025.

Mike Hayes, managing director at Insight Partners: Our findings suggest a slight increase in tech budgets, emphasizing areas with direct measurable ROI and fulfilling defined KPIs.

Jason Mendel, venture investor at Battery Ventures: We project an increase in IT budgets targeted at innovative technologies. Recent polls indicate that 74% of executives surveyed intend to boost their tech spending in 2025.

Trends in AI Adoption Among Enterprises

Paul Drews, managing partner at Salesforce Ventures: Every enterprise function can potentially benefit from optimization through AI, particularly with the rise of agentic AI. The demand for AI solutions for productivity enhancement is on the rise.

Mark Rostick, vice president and senior managing director at Intel Capital: Presently, utilizing AI via application vendors is a more practical path than creating personalized platforms due to the fragmentation in the market.

Raviraj Jain, partner at Lightspeed Venture Partners: An emerging consensus suggests that AI adoption will accelerate in 2025, motivated by enhanced model capabilities and the growth of enabling infrastructure.

Growth Opportunities in Venture Portfolios

Marell Evans, founder and general partner at Exceptional Capital: The surge in demand from AI-ready clients leads to faster sales cycles, allowing organizations to expand their scope from immediate concerns to more strategic solutions.

Kathleen Estreich, partner at Pear VC: We observe remarkable progress in vertical agents catering to specific customer requirements. Vertical SaaS offers enormous possibilities for workflow improvement with tailored agents.

Janelle Teng, vice president at Bessemer Venture Partners: Companies in the defense technology realm are experiencing significant growth, aided by the Department of Defense’s proactive stance on AI adoption.

Mark Rostick, vice president and senior managing director at Intel Capital: We are focusing our portfolio on organizations specializing in infrastructure software that ensures seamless operations for AI applications.

Ed Sim, founder and general partner at Boldstart Ventures: This technological transformation shows no sign of deceleration. We are witnessing a monumental change in the venture capital landscape that is likely to accelerate further.

Outlook for the Exit Environment in 2025

Cathy Gao, partner at Sapphire Ventures: I predict an increase in M&A activity as larger companies venture to acquire AI talent. However, the IPO market might still tread cautiously, although rapid-growth startups with profitability metrics may consider this avenue.

Nina Achadjian, partner at Index Ventures: I anticipate heightened liquidity opportunities in both M&A and public markets during 2025.

Aaron Jacobson, partner at NEA: With the expected shifts in administration policies, we might see a resurgence of significant M&A deals alongside multi-billion-dollar valuations for leading AI firms.

Marell Evans, founder and general partner at Exceptional Capital: A slight uptick in exit activity is anticipated next year, with potential mergers and acquisitions, although cautious economic conditions could dampen overall volume.

Kirby Winfield, founding general partner at Ascend: The new regulatory environment may facilitate acquisitions by larger tech companies, but the IPO sector may still lag, given the attractive valuations in private markets.

Andrew Ferguson, vice president at Databricks Ventures: The likelihood of increased M&A activity will depend on improved market conditions and a more lenient regulatory atmosphere in 2025.

Paul Drews, managing partner at Salesforce Ventures: Initiatives aimed at enhancing government efficiency, paired with relaxed regulations, could stimulate investment growth and exits within the tech domain.

Mike Hayes, managing director at Insight Partners: Enterprises are expected to focus more on acquiring talent through acquisitions, especially for mission-critical technology solutions in 2025.