Hedge funds and other investment firms are expected to significantly increase their budgets in 2025 for alternative datasets, which provide insights through data from sources like cell phone geolocation, credit card transactions, and satellite imagery, according to a report by Business Insider.

The reports cites a survey of 60 buyers — including hedge funds, venture capital firms, and consultants — by industry consultancy Neudata, as revealing that 95% of respondents expect their data budgets to grow or stay the same in 2025. More than 70% of data providers meanwhile, have reported a rise in sales this year, with expectations of continued growth next year.

"The mood among alternative data buyers and sellers is one of confidence," Neudata’s report stated, predicting a "budget boom" in the industry.

Alternative datasets, once considered a luxury, are now increasingly viewed as essential. On average, buyers work with 20 data vendors and spend $1.6m annually — about $80,000 per dataset. Large, multi-strategy hedge funds, however, spend significantly more, with an average of $5m per year on data from 43 vendors.