Menlo Ventures’ fourth annual State of Enterprise AI report counts $176.8 billion in enterprise AI deployment spend for 2026 and finds limited evidence that companies are replacing Salesforce’s CRM with AI. The budget detail underneath gives a sales leader more to work with than either number.
What the report counted
Menlo estimates enterprises spent $176.8 billion on putting AI to work as of September, up from $33 billion a year earlier. It surveyed roughly 400 U.S. enterprise decision-makers and asked where the incremental dollars came from. Net-new budget funded 55%. Software budgets funded 22%. Of that software slice, 13% stayed with incumbents converting existing licenses to AI products, and 9%, or $12.6 billion, moved to AI-native vendors.
Menlo puts the drag on the $600 billion application software market at about two points of growth, from 13% last year to 11% this year. Its study found “limited evidence of enterprises replacing core systems” with AI, and it names Salesforce’s CRM, Workday’s HRIS and Oracle’s NetSuite as examples.
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Sales is a small line in a large market
Menlo sizes the AI application market at $77.3 billion, and two categories hold 76% of it: coding at $34.0 billion and chatbots at $25.0 billion. Sales appears further down, at $1.4 billion and up 3.6x, in a group of horizontal apps that Menlo says combine for $8.8 billion outside coding and chatbots. Menlo names Clay and Monaco as the standouts, describing Clay as using web agents to research prospects and enrich accounts and Monaco as an AI-native CRM that updates itself so reps sell instead of entering data.
Customer support, at $2.7 billion and up 4.3x, is almost twice the size of sales in the same report. Menlo’s explanation for the gap is that agents do best where they have systems to act in, complete context to learn from and outcomes someone can verify. It says most enterprise markets lack those three conditions, so the opportunity is to build them.
In our reading, sales has the first condition in its CRM and engagement tools and the second in call and email history. The third is the weak spot, because a closed deal arrives long after the agent’s work and many people touch the account in between.
What it means for the sales leader
Three practical points follow from the report’s numbers.
First, the CRM stays. Menlo says incumbents hold ground “where they are the system of record and AI has to fit into established workflows,” and it lists ServiceNow at 91% of IT spend, Databricks and Snowflake at 88% of data science and Workday at 68% of HR. Sales is not on that list of share figures, so this report does not give a CRM share number. What it does show is the pattern: where a system of record exists, the incumbent’s AI product is the default option, so the buying decision is whether to add that product.
Second, the money for agents is mostly new money. With 55% of incremental AI dollars coming from net-new budget, a CRO who wants an agent platform does not have to take the dollars from the CRM renewal. The request is a new line, and finance will want a measure to attach to it.
Third, agents change what a contract measures. Menlo observes that agents “work independently, run in parallel, and keep going even after people step away, so spending scales with work rather than headcount.” Per-seat contracts, the standard in sales software, were built for the opposite case.
Two vendors, two answers
Two announcements this week show the split. On November 4, Salesforce said more than 185,000 people use Agentforce Coworker and priced it at $50 per user per month, a seat model on an agent product. The same day, Nooks announced $500 million in growth capital and a platform of agents that it says work toward goals “like pipeline created and deals advanced.” Nooks CEO Dan Lee said in the release: “There are 12 million people who sell for a living in the US alone and all their jobs are about to change.”
The two companies are making different bets on how a sales team should pay for software that does work. Salesforce keeps the user as the unit. Nooks ties its pitch to outcomes, and says its agents run on its own dialing and sending infrastructure so they see what happens next.
Where the report is thin on sales
Menlo’s sales figures come from a single paragraph. The report does not break out the sales market by product type, does not give incumbent share for CRM, and does not say how many of the 400 respondents were buying for a revenue team. The CRM finding is therefore a statement about enterprise software buyers in general, with sales as one case. Menlo is also a venture investor, so the report is a view from the funding side of the market.
The report’s adoption numbers also cap how far to read the spend. Spend per enterprise nearly quintupled while the share of enterprises using AI rose from 55% to 65%. Menlo attributes the gap to a small group of power users who account for a disproportionate share of spending. A sales organization is likelier to sit in the long tail than in that group.
What to do with it
Take two things into the next planning cycle. Ask for the agent line as new budget, with a named owner and a measure such as pipeline created or meetings held. Then ask every agent vendor how the contract changes if the agent does ten times the work next quarter. Our recent coverage of AI spend risk moving from the contract to the control panel covers the controls side of that conversation.
