Grafana's $600 million milestone shows the AI boom is entering the messy reality of deployment

Grafana Labs cofounder and CEO Raj Dutt.

Richard Theemling Photography Grafana surpassed $600 million in annual recurring revenue as companies move AI into production.

AI is creating new IT system needs as companies deploy it at scale, said CEO Raj Dutt.

Grafana says its AI assistant is the fastest-growing product in its history.

Companies are moving out of the AI experimentation phase and actually putting it to work, and Grafana Labs ' surging growth proves that, its CEO says.

Companies have poured billions into the promise of AI, though deploying it at scale has been slower going and expensive, as many wrestle with costs, security, and reliability .

Now, they're increasingly confronting the next question: how to manage AI once it's running.

"We've moved on from proving value to the next set of expected questions," Grafana CEO and cofounder Raj Dutt told Business Insider.

"How much does this stuff cost? Is it governed well? Is it performing well? Is it reliable?" That's proving lucrative for the 12-year-old observability company.

Grafana, which helps businesses monitor and troubleshoot their software systems, said it surpassed $600 million in annual recurring revenue and 10,000 customers globally.

That's up at least 50% from $400 million in September.

Dutt said AI is a "major factor" behind the company's accelerating growth.

Grafana has seen more business from AI companies, while existing customers increasingly use its AI products.

AI has also created bigger observability bills by generating more data and more issues for companies to monitor.