Enterprise LLM Spend Reaches $8.4B as Anthropic Overtakes OpenAI, According to New Menlo Ventures Report on LLM Market

July 31, 2025 at 09:00 AM EDT

MENLO PARK, Calif., July 31, 2025 (GLOBE NEWSWIRE) -- Enterprise spending on large language models (LLM) has more than doubled in just six months, rising from $3.5 billion in late 2024, to $8.4 billion, according to a new report released today by Menlo Ventures.

The 2025 Mid-Year LLM Market Update, based on a survey of 150 technical leaders across AI startups and large enterprises, captures a rapidly maturing market where inference has overtaken training, performance dictates vendor choice, and a dramatic shift in market leadership is underway.

Anthropic Surpasses OpenAI as Enterprise Foundation Model API Leader; Google Takes Third

According to Menlo Ventures’ data, OpenAI dominated the enterprise LLM market through 2023, accounting for 50% of usage. But the latest data reveals that its share has now fallen to 25%. In that time, Anthropic has emerged as the new market leader, capturing 32% of enterprise usage across production workloads. Google has also gained significant ground, climbing to 20% on the strength of its Gemini models, Meta’s Llama holds 9%, while DeepSeek accounts for just 1% of LLM API usage.

“Some might be surprised to see Anthropic overtake OpenAI, given its first mover advantage. But our research puts real numbers behind what we’ve heard anecdotally from the market: Teams are prioritizing real performance in production. As enterprise LLM spend crosses $8 billion, Anthropic is capturing the majority share, and Google has quickly gained ground to claim the number three spot,” said Tim Tully, partner at Menlo Ventures.

Key Findings from Menlo Ventures’ 2025 Mid-Year LLM Market Update

Enterprise LLM spend more than doubled in just six months, rising from $3.5 billion in November 2024 to $8.4 billion by mid-2025 as workloads moved into full production.

Anthropic is now the leading enterprise LLM provider with 32% market share. OpenAI holds 25%, down from 50% in 2023. Google has taken third place, claiming 20% of enterprise usage with strong adoption of its Gemini models.

Vendor switching is rare: According to the report, only 11% of teams report changing model providers in the past year. But 66% upgraded to newer models from their existing vendor, while 23% made no changes or upgrades at all.

Closed-source models now dominate, powering 87% of enterprise workloads. Open-source usage fell from 19% to 13% over the past six months as performance gaps widened.

Inference has overtaken training as the primary workload, with 74% of startups and 49% of enterprises reporting that inference accounts for most of their compute usage. Both figures are up significantly from November of last year.

Looking Ahead: The Rise of Agents

Looking ahead, Menlo Ventures’ report predicts that long-horizon agents will drive the next major evolution of the enterprise AI stack. These systems are designed to autonomously tackle multi-step, open-ended tasks such as software development, research synthesis, and operational workflows, ultimately delivering true auto-remediation.

While still early in deployment, Menlo Ventures believes these agentic systems will play a central role in the next wave of enterprise AI transformation.

“Long-horizon agents represent an operating model shift,” said Derek Xiao, an investor at Menlo Ventures. “The startups building agentic infrastructure today are laying the foundation for the next generation of $10B-plus platforms. With legacy vendors lagging behind, the opportunity is massive.”

To read the full report, visit: https://menlovc.com/2025-mid-year-llm-market-update/.

About Menlo Ventures
Menlo Ventures is a leading early-stage venture capital firm investing at the forefront of AI. Our portfolio includes more than 85 public companies and over 170 exits through mergers and acquisitions. Currently managing more than $7 billion in assets, we invest at every stage across consumer, enterprise, and healthcare. Our portfolio companies include Abnormal AI, Anthropic, Benchling, Carta, Chime, Harness, Poshmark, Recursion, Roku, Siri, Typeface, and Uber. We strive to have a positive impact on everything we do. When we’re in, we’re ALL IN, and we are ALL IN on AI.
www.menlovc.com
@MenloVentures

Media Contact:
For more information or to schedule an interview with one of the report authors please contact menlo@nectarpr.com.

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