Customer Service AI Spending Surges Amid Budget Stagnation

Artificial intelligence spending by customer service leaders has surged despite near-stagnant overall budget growth for customer service and support functions, according to a survey by Gartner.

The research firm found that customer service organizations are prioritizing technology investments as AI rapidly reshapes the function. Spending on AI has increased by 38 percent, while overall service and support function budgets have grown just 2 percent. 

"To fund ambitious AI initiatives, leaders are increasingly redirecting spending away from labor and overhead and instead toward technology. The challenge is ensuring those investments produce measurable business value," said Kim Hedlin, director analyst in the Gartner Customer Service and Support Practice. "Hype alone doesn't make a technology the right solution to real business problems."

While service and support leaders report that live chat and phone remain their most valuable customer service channels today, they expect AI-powered channels and platforms to drive the greatest value in the years ahead. Looking two years down the road, respondents predict generative AI chatbots will become the most valuable customer service channel, followed by live chat and genAI voicebots.

The research also identified three technology platforms expected to deliver substantially greater value to customer service and support organizations over the next two years:

• No-code agent builders;
• Communications platforms-as-a-service; and
• Customer identity and access management.

"Organizations are moving beyond isolated AI use cases and toward connected ecosystems of AI agents," said Daniel O’Sullivan, senior director analyst in the Gartner Customer Service and Support Practice. "The technologies that will create the most value are those that help organizations build, deploy and govern these agents securely and at scale."