Tomasz Tunguz (Theory Ventures) · 2024-05-17 · 748d

AI Software Market Growth Moderating: Spending Patterns Reveal Customer Expansion Over New Acquisition

Ramp's quarterly spending analysis reveals AI software companies are experiencing 78% decline in annual growth rates while customer acquisition slows, though net dollar retention remains strong at 129% median. The market shows signs of maturation as technology evolves rapidly, pricing deflates (OpenAI cut prices 50%), and buyer preferences shift toward understanding real application value.

9 metrics· Cited 0× in the knowledge base ·Open source ↗

Metrics in this report

AI Software Card Transaction Volume Growth

293%

year-over-year

Q1 2024

Account Churn

15-25%

range

companies with negative account retention at current price points

Annual Growth Rate Decline

78%

decline

across most popular AI vendors

Customer Count Growth

105%

mean

AI businesses

Customer Count Growth

38%

median

AI businesses

Net Dollar Retention

125%

top quartile

AI software companies

Net Dollar Retention

129%

median

AI software companies above top quartile

Overall Software Transaction Volume Growth

6%

year-over-year

same period as AI metrics

Price Reduction

50%

reduction

OpenAI pricing cut