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Forrester analysts warn around four in five leaders and ITDMs envision having larger budgets in 2027

Consumption-based AI pricing is making it harder to predict outlay

Targeted investment to improve data quality is key

Forrester is predicting software budgets could be set to rise, with more than four in five leaders expecting to increase overall budgets over the next 12 months and 82% of tech decision-makers expecting larger budgets.

While some of the extra cash could come as a result of increased confidence and readiness to spend on tech, the company's analysts warn that a shift in pricing structures could also be forcing companies to fork out more.

This comes as software vendors shift from traditional per-seat licences to token or credit pricing, which introduces so many more variables including model selection, context size, output length and agent operating time, leading to far more unpredictable outgoings.

The real reason businesses are preparing to spend more on software

"Business leaders are no longer planning for a return to stability – they’re planning for a future where volatility is a constant,” Chief Research Officer Sharyn Leaver noted.

Recent shifts from major AI providers all point toward this emerging pricing model becoming the norm, with GitHub moving its Copilot plants to usage-based billing in June and OpenAI adding pay-as-you-go Codex seats in April. Anthropic also recently removed Fable 5 from its standard subscriptions and seat-based models over difficult-to-predict demand, but set out plans to reintroduce it where capacity permits.

Acknowledging these major shifts, Forrester's report reveals two areas where companies can increase their budgets for 2027 – building machine-readable context and enterprise knowledge, and increasing brand visibility in answer engines.

The report also hints at the major role AI can play in marketing and customer-facing experiences, and the potential use that synthetic data can provide subject to testing. All in all, it's more about targeting investments rather than throwing cash at the problem, as Leaver concludes:

"The organizations that outperform in 2027 won’t be those that spend the most on AI. They’ll be the ones that invest in the foundations that make AI effective."

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FARNBOROUGH, England, July 17 (Reuters) — Spiraling security risks are expected to push defense to the forefront of Britain’s Farnborough Airshow, as aerospace and arms makers struggle to keep pace with demand for weapons while cementing a fragile recovery in civil jet and engine production.

With the Ukraine war in its fifth year and a ceasefire in tatters in the Gulf, those risks are also likely to move the ritual contest between Boeing and Airbus for jetliner orders down the pecking order at the July 20 to 24 show.

“The global security environment is arguably more complex and volatile today than we have seen in many, many decades, and we are watching security threats evolve at a breakneck pace,” Air Chief Marshal Harv Smyth, head of the Royal Air Force, told an International Air Chiefs Conference ahead of the show.

Weapons makers enter their biennial bazaar witnessing the biggest rise in European defense spending since the Cold War but with unresolved questions about where and how it will be spent.

First the coast guard, then an ICBM: China tests new, long-term ways to hold off rivals in Asia

One of the industry’s most influential figures warned the shift to drones and AI systems could disrupt defense as much as SpaceX transformed the launch business, as wars in Ukraine and Iran expose the need for faster developments and mass production.

“I know both worlds and they couldn’t be further apart,” said ex-Airbus CEO Tom Enders, who is co-chairman of German defense startup Helsing and heads foreign policy think tank DGAP.

“We used to have a saying that traditional defense companies … would only pick up a pen if the government paid for it,” he said in an interview on the eve of the show.

“The younger companies are aggressive, not risk-averse. They spend their own money. Procurement agencies and armed forces increasingly understand that this is the way for a dynamic fast-moving industry,” said Enders, who also chairs tank maker KNDS.

While some new budgeted funds will be spent on today’s warplanes like the Lockheed Martin F-35 and the Eurofighter — both performing displays next week — startups like Helsing and U.S.-based Anduril are pushing AI-driven systems like uncrewed fighter cohorts, despite initial setbacks.

“Valuations are tilting in favor of the defense entrants but … most militaries are still spending the vast amount of their resources on manned platforms,” said Byron Callan, managing partner of research firm Capital Alpha.

Organizers said defense will represent half of the record 1,600 exhibitors at the show, up from 40% historically, with a sharp increase in AI, deep-tech and finance companies.

Commercial jet sales, supply chains

On the commercial side, Airbus and Boeing are expected to announce new orders and disclose customers behind previously booked deals.

But with delivery slots largely sold out well into the next decade, the usual scrum of media announcements is likely to attract less attention as investors focus instead on aircraft deliveries, where manufacturers generate most profits.

Air shows can still produce surprises, but industry sources said total deals may struggle to climb far above 300 aircraft, well below some pre-show forecasts of as many as 800 jets. The tally could also include deals that have already been announced.

Separately, Air China said it would order 55 Airbus jets.

“Winning orders is not the question. It’s not the relevant measuring stick that it used to be because of production capacity constraints,” said Jerrold Lundquist, managing director of advisory firm The Lundquist Group.

Aerospace has been wrestling with supply problems since COVID-19, especially for castings and forgings — critical parts made to exacting standards from molten or solid metal.

Fixing such issues is key to a repeatedly delayed target by Airbus to lift single-aisle jet output by about 25% to 75 a month in 2027. Boeing, looking to narrow a gap against its rival and put a floor under declining market share, has signaled it is studying production above currently targeted levels.

“The supply chain...has improved relative to where it was a year or two ago but (not) to the point where Airbus can pursue its goal of 75,” said manufacturing expert Kevin Michaels, managing director of AeroDynamic Advisory.

“And as Boeing raises rates, it’s surely going to cause issues there as well,” he added.

Delays in engines and interiors have also been among the most persistent supply-chain headaches. But the show will open on a more positive note from the world’s largest engine maker.

“I do think the supply chain has really turned the corner,” GE Aerospace CEO Larry Culp told Reuters. “(There is) more work to do.”

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Anthropic has a new 'hard questions' ad for Claude and AI

Reactions to the short clip have been mixed

OpenAI boss Sam Altman says the ad feels like satire

Anthropic has a new ad out for its Claude AI chatbot, and it ties into its Hard Questions project — an attempt to bring attention to some of the main concerns and hopes that people have about the future of AI. Will it take my job? Can it lead to new scientific discoveries? Why is there a new data center in my neighborhood?

You can see the short film below, which features voices "from real people" that Anthropic has spoken to. Alongside shots of burning buildings, lab researchers, and racks and racks of hard drives, we have ruminations over whether AI can be trusted and how it might affect communities, education, and what it means to be human.

Anthropic has boldly left the comments enabled on the video, and it's fair to say there's a mix of opinion: various posters have branded the clip as "dystopian marketing slop", a sign of "dark times", and "pretty horrifying". One commenter points out that the final "keep thinking" tagline is a strange choice for a technology that generally makes us think less .

There are plenty of positive opinions too, with some calling the ad "profoundly beautiful", "great", and "thought-provoking", and even "the greatest commercial I've ever seen" in one case. Quite a few YouTuber users in the comments are simply asking for more access to the latest Claude Fable AI model .

Questions and answers

i thought this was satire, kept looking for the handle to be spelled c1audeai or something https://t.co/4AVBA93Z27 July 14, 2026

The ad has even caught the attention of Sam Altman, CEO of Anthropic rival OpenAI. His response to the clip was to say that he "thought this was satire", though it's worth remembering that he's not the most neutral of observers. Anthropic CEO Dario Amodei was previously vice president of research at OpenAI.

What we can say for sure about the ad is that it's addressing many of the issues that are in the public conversation right now when it comes to AI technology. Anthropic has also launched a Hard Questions web portal where you can listen to some of the conversations the company has had with people across the US.

The topics covered include the use of AI in medical diagnosis, safeguards around the misuse of AI, the resources needed to run data centers, how the technology might impact our critical thinking skills and creativity, which jobs might ultimately be replaced by AI, and what it's going to be like for kids to grow up with AI.

Clearly this debate is going to go on and on across the years to come, but it does feel like the tension has never been greater between the hype and the backlash around AI. Big AI companies like Anthropic are going to have to work hard to keep users and governments on side as the technology becomes even more powerful and pervasive.