Amid cost pressures, policy shifts and geopolitical risks, more than a third of finance leaders have already paused at least some capital spending and cut costs in virtually all areas except for AI.
A survey from Gartner of 197 finance leaders found that 17% paused or deprioritized capital spending by 1-10%, a further 17% have done so by 10-25%, and 3% say they have done so by more than 25%. Only 8% say they are planning to increase capital expenditures. The report said finance leaders are reacting to uncertainty in the economy and are choosing a more conservative approach until more clarity is gained on federal policy and geopolitical risks.
“The high percentage of CFOs considering or already pausing capital projects aligns with the strategy of preserving optionality and tightening control over capital outlays until they have clarity on inflation and the federal, tax policy and geopolitical risks. Particularly, new tax legislation that will alter depreciation schedules and interest deductibility rules is causing finance leaders to pause asset-heavy investments until they gain clarity,” said the report.
Eugenia – stock.adobe.com
Beyond pausing new spending, finance leaders have also been cutting costs. A combined 67% of finance leaders are either currently cutting costs with more cuts expected, have completed cuts or are planning to cut in the second half of the year.
On the other hand, 33% said that while they are cutting costs in some areas, they are increasing them in others, with an overall net reduction; and 15% said they were doing so with an overall net increase. Where is this increase? Most likely AI. While the data was not in the survey itself, Gartner based its conclusions on the literally hundreds of conversations its staff has with finance leaders every month. In particular, companies are seeking:
- Customer-facing AI — GenAI tools for sales enablement, service automation and marketing personalization remain funded, with CFOs expecting near-term gains in revenue efficiency and customer retention.
- Product and engineering — AI-infused product features are being prioritized, but budgets are contingent on time-to-value and the ability to differentiate in-market.
- HR and talent — Workforce planning and recruiting automation are advancing as CFOs seek cost-effective ways to align skills with strategy.
- Risk and compliance — AI for fraud detection, regulatory surveillance and vendor risk scoring continues to scale, especially in financial services and healthcare.
- Data and infrastructure — Select investments in cloud, AI-ready data architecture and large language model tooling are moving forward but only when tied directly to business use cases — not platform aspirations.
“We see that even as CFOs tighten cost controls and pause on large-scale investments, they’re not retreating from AI,” said the report. “Instead, they’re sharpening their focus — shifting from broad experimentation to targeted enterprise use cases that offer measurable impact.”