State of AI: Bi-Annual Snapshot - The Execution Era of AI (ICONIQ)

Summary

• Nearly 70% of companies are building vertical AI applications.p.4
• 49% of teams cite application-layer innovation as their primary source of differentiation.p.4
• Companies now use ~3.1 model providers on average, up from ~2.8 six months ago.p.4
• Only 14% of respondents say their differentiation comes mainly from proprietary model development or fine-tuning.p.6
• Only 52% of builders adopt automated eval frameworks, with evaluation still largely user feedback-driven and manual.p.10

Key insights

1. Builders are focused on delivering differentiated products at the application layer rather than on foundational models.p.4
2. Data foundations remain a key execution bottleneck, with most companies reporting they are only mostly or somewhat ready.p.4
3. 35% of respondents say differentiation depends on both model and product innovation.p.6
4. Respondents selected ~2.4 different evaluation techniques on average.p.10
5. Respondents are generally using OpenAI plus 1-2 other providers.p.9