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Deployment & application

Startups' share of enterprise AI application revenue

Share of enterprise generative-AI application revenue earned by startups rather than incumbents, from Menlo Ventures' annual buyer survey.

Reason through this

The reading

Startups went from a third of application revenue in 2024 to nearly two thirds in 2025 in Menlo's sample; one survey, so read as a direction.

Direction over the last 2 readingseach dot links to its record
us enterprise · 36.0% · 2024-12-31 · reportedus enterprise · 63.0% · 2025-12-31 · reported
in the rule's windowmoves within ±5.0 pts read as stable, and a move counts only if more than half the steps go its way; this window moved +27.0 pts and 1 of 1 steps rose; higher reads dispersing
reported

2 readings drawn from menlo.us_enterprise.startup_app_revenue_share.fy; 2 observations in the evidence.

Source: Menlo Ventures, State of Generative AI in the Enterprise. Menlo Ventures, '2025: The State of Generative AI in the Enterprise'.

The numbers
as ofreadingvaluerecord
2025-12-31us enterprise63.0%reported
2024-12-31us enterprise36.0%reported

Why it matters

Whether incumbents with distribution keep the application layer or startups take it is the Teece question at the top of the stack; Menlo's survey is the only published split.

What cuts against it

One survey of buyers; revenue share is not margin share; incumbents' embedded AI features are excluded by Menlo's scope.

How it is measured

Two annual waves, so the trend is one step; under five points is survey error. Rising startup share = value dispersing away from incumbents.

Applied to menlo.us_enterprise.startup_app_revenue_share.fy.

Latest readings
  • 2025-12-31 us_enterprise · 63.0%as of 2025-12-31
  • 2024-12-31 us_enterprise · 36.0%as of 2024-12-31
Why this status, and its history

Menlo Ventures' buyer survey: startups earned 36% of enterprise generative-AI application revenue in 2024 and 63% in 2025 (nearly $2 for every $1 earned by incumbents), a 27-point move against a five-point dead band, so the direction reads dispersing away from incumbents. Capped at emerging because Menlo is the only source and a survey is tier 6. Initial seed.

  1. 2026-09-10unmeasured to emergingconf — → 50 · the evaluator (automatic)

    Menlo Ventures' buyer survey: startups earned 36% of enterprise generative-AI application revenue in 2024 and 63% in 2025 (nearly $2 for every $1 earned by incumbents), a 27-point move against a five-point dead band, so the direction reads dispersing away from incumbents. Capped at emerging because Menlo is the only source and a survey is tier 6. Initial seed.

    source1
Why this confidence

Rests on 2 observations from Menlo Ventures, State of Generative AI in the Enterprise; best evidence tier 6, grade B; current.

Confidence is independent of status: 90–95 multiple strong independent sources; 70–89 good evidence, some ambiguity; 50–69 mixed or hard to operationalise; 0–49 limited or vague evidence.