AI Revolution Unfolds Despite Regulatory Scrutiny, Says Wedbush’s Dan Ives

The artificial intelligence revolution is accelerating at breakneck speed, with enterprise adoption expanding rapidly despite looming regulatory concerns, according to a leading Wall Street technology analyst.

“The technology is going 100 miles an hour in the left lane in a Ferrari. The regulatory is in the right lane going 35 miles an hour,” said Dan Ives, Wedbush Securities global head of technology research, during an appearance on CNBC’s “Squawk on the Street.”

As tech executives including OpenAI’s Sam Altman testified before the Senate this week, Ives emphasized that regulation is unlikely to stem the tide of AI investment and implementation. “A lot of this spending that regulatory is not going to change. And a lot of it’s going to be self-regulatory,” Ives noted.

The analyst highlighted a dramatic expansion in AI applications across industries, stating, “Right now we have 85 use cases. A year ago we had ten.” This proliferation spans multiple sectors including healthcare, financial services, government, and retail.

According to Ives, corporate AI spending has increased substantially, now representing approximately 15% of technology budgets compared to just 1-2% a year ago. This acceleration comes at a critical moment, as many observers wondered if economic pressures might cause companies to pull back on AI investments.

“If there was a time that they were going to put a brake on it and you were going to actually see a step back, it was going to be this quarter,” Ives explained. Instead, his channel checks revealed continued acceleration in spending, reinforcing his bullish outlook on companies positioned to benefit from AI adoption.

Ives specifically mentioned Palantir as a “case study” demonstrating the potential for AI to drive business transformation, noting the company’s U.S. commercial business “exploded” as enterprises implement practical AI solutions. He also expressed optimism about other players including ServiceNow, IBM, and hyperscalers.

The analyst predicted significant consolidation in the AI space, with larger technology companies likely to acquire smaller, emerging players. “The stronger going to get stronger,” Ives said, suggesting that despite regulatory scrutiny, companies like Microsoft, Alphabet, and IBM will be looking to strengthen their AI positions through strategic acquisitions.

When asked about recent comments from Apple that appeared to question its long-term relationship with Google, Ives characterized it as a “shot across the bow” but downplayed concerns about immediate disruption to Google’s search business. “The bark is worse than the bite here,” he said, suggesting market reaction to the news was overblown.

Despite tariff concerns, regulatory hearings, and market volatility, Ives remains convinced that the fundamental AI transformation underway will continue unabated. “This AI revolution in my opinion it’s another Jalen Brunson moment for tech,” Ives concluded, making a sports analogy to emphasize the decisive nature of the current technology shift.

As enterprises increasingly implement AI solutions that deliver measurable efficiency gains and margin improvements, Ives believes we’re witnessing the early stages of a “fourth industrial revolution” that regulatory constraints cannot halt.

*Source: CNBC’s “Squawk on the Street” interview with Dan Ives, Wedbush Securities global head of technology research*