AI Spending Puts the Squeeze on IT Modernization, Risking ROI
CIO, Thursday, September 24th, 2026
AI budgets are consuming funds needed for legacy modernization, with most firms delaying transformation projects.
An Ensono survey finds 61% of organizations have paused, delayed, scaled back or abandoned IT modernization projects in the past two years, with more than 70% facing budget overruns above 51%, as AI initiatives compete for the same funding.
Industry experts note the two priorities are actually interconnected: the data infrastructure and governance work central to modernization is a prerequisite for AI to succeed, not a rival to it.
The article argues CIOs must resist treating AI and modernization budgets as separate pools if they want either investment to pay off.