Nearly 79.1% of cost estimation and planning professionals report increasing their AI investment, while 60% are actively experimenting with or piloting AI in estimation.
However, the governance infrastructure hasn’t kept pace with the spending.
That’s becuase organizations are simultaneously restricting and adopting AI, with the fastest-growing usage happening outside formal oversight, according to Galorath Incorporated’s 2026 State of the Industry Report, conducted in partnership with NewtonX.
“A year ago, the concern was that organizations weren’t adopting AI fast enough,” says Charles Orlando, chief strategy officer at Galorath. “Now they are, and the new problem is that governance didn’t move with it. Organizations have more data, more tools, and more visibility than at any point in modern history, but their confidence in translating that into reliable plans is declining among the leaders closest to strategic risk.”
Key takeaways:
· Last year’s inaugural report found that AI adoption was lagging behind the hype, with 63% of organizations reporting no AI integration in their daily workflows.
· Among the organizations actively increasing their AI investment, 51% report significant improvement in planning accuracy and estimation confidence. Among the organizations taking a more cautious approach, only 11.1% report the same. The differentiator is not adoption itself but the depth of commitment: AI paired with governance, integration, and process redesign produces measurable results; AI layered onto existing workflows without structural change does not.
· Nearly four in five organizations (77.7%) report data governance restrictions that limit AI adoption in estimation workflows. Yet 70.9% simultaneously report that shadow AI, meaning informal and ungoverned AI use, is common in their operations. Only 23.6% of respondents report having clear, documented AI policies.
· Among operational practitioners, 20% report being “very confident” in their organization’s estimation processes. Among organizational leaders, that figure drops to 11.9%, a gap that inverts conventional assumptions about where confidence sits in an organization. Despite a year of increased AI spending and broader adoption, overall confidence has not meaningfully improved from the 2025 baseline, a directional comparison that suggests organizations invested more without feeling materially better about the accuracy of their plans.
· Trade policy has displaced cost volatility as the single largest external disruptor, cited by 47.3% of respondents and outpacing regulatory constraints (34.5%) and energy pricing (10.5%). Practitioners report trade policy impact at 52.9%, compared to 43.7% among leaders, a gap that reflects how policy volatility hits execution before it registers at the strategic level.
