AI is a new technology, and young people are taking to it in big numbers.
New data from a16z, sourced from Bank of America internal transaction records, shows a sharp and widening gap in how different generations are spending on AI tools. Measured as an indexed figure with 2024 as the baseline (100), median household AI spending among Gen Z and Younger Millennials has surged dramatically through 2025 and into 2026 — while Older Millennials and Gen X have largely flatlined.
The Numbers
Gen Z started 2025 at around 100 on the index and climbed to roughly 155 by February 2026 — a 55% increase in just over a year. Younger Millennials had an even steeper trajectory: they began the period near the same baseline but accelerated sharply from April 2025, ending at approximately 154 by February 2026.
Older Millennials, by contrast, appear to have front-loaded their AI spending. They started January 2025 already elevated at around 135, climbed briefly to 143 by February, and then stayed almost perfectly flat for the rest of the period. Gen X spending has been essentially static throughout — hovering near 128 for the entire 14-month window.
What’s Driving This
The divergence likely reflects how these groups use AI, not just whether they use it. OpenAI CEO Sam Altman has noted that younger users treat ChatGPT like an operating system — building complex workflows, connecting files, and embedding AI into their daily routines — while older users tend to treat it as a search engine replacement. That deeper integration naturally drives higher and growing spend.
There is also a market expansion dynamic at play. Gen Z and Younger Millennials appear to still be in an adoption phase — their spending curves have a pronounced S-shape, with acceleration through mid-2025 before tapering toward a new plateau. This suggests a cohort actively adding new AI subscriptions and tools. Older cohorts, already at their equilibrium, have little incremental spend to add.
Tech companies are pouring money into AI infrastructure on the expectation that consumer demand will continue to grow. These generational spending patterns suggest they’re right — but the growth may be concentrated in younger demographics for the foreseeable future.
The Implications
For AI companies, the data reinforces a consumer strategy already playing out: pricing plans, product features, and marketing are increasingly aimed at younger, digitally-native users willing to pay monthly for tools they treat as essential.
It also explains why OpenAI has been running aggressive campaigns targeting students, and why the competitive battleground for AI assistants is focused on habits, stickiness, and daily use — metrics where younger users lead by a wide margin. ChatGPT’s daily stickiness — the share of monthly users who open it every day — has grown to over 42%, and it is disproportionately younger users driving that engagement.
The flat lines for Gen X and Older Millennials don’t necessarily signal disengagement. They may simply reflect cohorts that have settled into a stable set of tools. But for an industry betting on continued growth in consumer revenue, the clear takeaway is: the next wave of paying users is young, and they’re already spending.