As 2025 comes to a close, it’s a good time to dig into just how impactful AI was to the IT world in general and MSPs specifically this year. So we pulled up interesting numbers and spoke to MSP 501 winners to see just how big a role AI played.

First, the numbers. Menlo Ventures' 2025 The State of Generative AI in the Enterprise report surveyed nearly 500 U.S. enterprises to find how they’re using AI. The survey found enterprise AI investment hit $37 billion in 2025, more than triple its $11.5 billion in 2024. “The fastest enterprise category expansion in history is unfolding now. Every major company is racing to integrate AI because the productivity gains are undeniable, and the competitive risk of falling behind is existential,” Partner at Menlo Ventures partner Tim Tully said.

According to the Menlo Ventures report, AI applications now represent 6% of the entire software market in three years since the ChatGPT debut. That makes it the fastest growing software category in history.

Menlo Ventures found 76% of AI solutions are now purchased vs. built internally, flipping from near-parity just 18 months ago as ready-made AI solutions reach production faster as enterprise tech stacks mature. Of companies on the MSP 501, 66% said they purchase pre-built AI solutions rather than build their own.

Menlo’s enterprise report found Anthropic (Claude) commands 40% of the enterprise LLM API market share, more than triple its 12% share in 2023, driven by its dominant performance in coding. ChatGPT maker OpenAI's share fell to 27% and Google (Gemini) climbed to 21%. The three leaders combined for 88% of enterprise model usage.

The same trio were at the top of the MSP 501 list, but in a different order. (The MSP 501 numbers were from 2024). ChatGPT was far ahead with 167 MSPs claiming it was their main LLM, followed by Google with 42 and Anthropic with 34.

Menlo Ventures found copilots accounted for $7.2 billion in 2025. These include Microsoft Copilot, ChatGPT Enterprise and Claude for Work. Seventy-two percent of the MSP 501 reported using Microsoft Copilot alone last year.

MSPs Find AI Ubiquitous

Looking beyond the numbers, 360 SOC CEO Chris Ichelson said AI is a part of every customer conversation.

“The biggest 2025 trend was a huge adoption of AI just as a seat in every conversation,” said Ichelson, whose MSP ranked No. 98 on the 2025 MSP 501. “In previous years there had been a rise in conversation around automation and across all IT domains, but now -- more than ever -- AI is being used organizationally wide. It is the third person now in every engagement or meeting.”

Chuck Canton, CEO of Sourcepass (No. 35 on the MSP 501), agreed that AI powered a “major shift” for MSPs this year.

“2025 marked a major shift in the MSP industry toward automated, measurable outcomes, with AI-driven ticket resolution, workflow orchestration, and proactive issue prevention replacing traditional reactive support models,” Canton said.

According to Menlo Ventures, enterprise investment is concentrated in three categories:

• Coding and developer tools ($7.3 billion, with half of developers now using AI daily)
• Industry-specific AI solutions ($3.5 billion, led by healthcare)
• General-purpose copilots ($8.4 billion)

“The biggest trend in 2025 obviously is LLMs and agentic AI, but I think the real big difference I see is AI coding and how utilizing AI to augment coding staff provides faster development and product build times,” said Jim Gurol, CEO of No. 103 California Telecom.

AI’s Challenges for 2026

While MSPs look to AI to help their own operations and those of their customers, the technology also brings challenges as we enter the new year. That is especially true for MSPs who sell cybersecurity.

"Unfortunately, cybercriminals are now operationalizing AI to automate reconnaissance, bypass traditional, signature-based identity controls, and craft highly convincing phishing and social engineering attempts,” CloudWave CEO Erik Littlejohn said. “Alarmingly, these new AI-powered attack methodologies can also adapt dynamically to avoid detection. In the coming year, the speed of AI-enhanced cyberattacks will outpace traditional cybersecurity defenses and human-led detection capabilities, requiring a shift towards autonomous/semi-autonomous AI-powered security solutions.”

Littlejohn, whose healthcare-focused MSP ranked No. 15 on the MSP 501, added “a primary challenge [in 2026] will be helping our customers adopt AI in a safe, compliant, and effective manner.”

Other challenges remain for MSPs in 2026 around AI.

“We need to continue to build new ways to make AI adoption simpler for clients,” said Tim Guim, CEO of No. 80 PCH Technologies. “We also need continue to find new ways to drive use cases for AI to improve our internal efficiencies.”

Pete Fidler, president of No. 369 WCA Technologies, added “There's a lot of misinformation out there as it relates to AI, and not only the capabilities of AI, but the security around AI and how you roll it out. So it's about understanding the proper way of rolling AI out so you're not putting yourself or your customers at risk.”