Posted on 02/12/2026 10:11:45 AM PST by fireman15
Why 95% of enterprise AI projects fail to deliver ROI: A data analysis American enterprises spent an estimated $40 billion on artificial intelligence systems in 2024, according to MIT research. Yet the same study found that 95% of companies are seeing zero measurable bottom-line impact from their AI investments.
The pattern is remarkably consistent across industries. Companies invest millions in AI infrastructure, train models on internal data, deploy systems to assist sales teams or automate marketing workflows—and then watch as adoption stalls or results disappoint. The technology works in demos but fails in daily operations.
MIT's Project NANDA calls it the "GenAI Divide"—just 5% of integrated AI pilots extract millions in value, while the vast majority remain stuck with no measurable profit and loss impact.
A 2025 ZoomInfo survey of go-to-market professionals found that while chatbots and simple customer relationship management (CRM) assistant tools have achieved the widest adoption in sales and marketing, over 40% of AI users report dissatisfaction with the accuracy and reliability of their AI tools.
The Consumer AI Paradox The most successful AI tools on the consumer market are often the least suited for business impact. Mass-market applications like ChatGPT have become fixtures of daily work, but their design creates fundamental problems when deployed in enterprise environments.
"The same users who integrate these tools into personal workflows describe them as unreliable when encountered within enterprise systems," MIT's Project NANDA study notes.
The reason lies in how these systems are designed. Consumer chat applications are essentially rewarded for generating plausible-sounding answers rather than admitting uncertainty—a trait that leads to "hallucinations" and fabricated information. In personal use, these errors are annoying. In business-critical workflows where AI agents operate autonomously, errors compound faster than humans can intervene.
(Excerpt) Read more at riograndeguardian.com ...
and this participated today’s huge market sell off.
Partially, I am sure. There are so many conflicting points of view. There are circular cash flows between hardware manufacturers and suppliers and those that are setting up server farms in conjunction with AI providers, along with a lot of other shady dealings. Some of these involving government entities and shady politicians.
And then there is the hype which has people and investors very confused. Much of the publicly available information shows that the entire tech sector is on an unsustainable path. And then there are companies who have bet the farm that they will be able to operate with less qualified and cheaper employees using AI tools... As the data comes in it has become more and more clear that this does not work out well in the long runs. AI bots tend to write code and scripts that are mediocre and is difficult to maintain because it constantly needs troubleshooting by the types of employees companies were hoping that they could get by without.
Mine and I concluded the same.
There is just no way these investments can generate cash flow large and fast enough to produce an even moderate return. The money is in the materials but for how long?
Has anyone seen a business plan for any of these base case AI investments? I have looked and not found any.
I built a model, have done so many times for many other investments, and can’t make this investment work witho any reasonable outlook even based on the AI guru’s wildest expectations. I see Wall Street is starting to push back on financing. Is the blush off the tulips?
$20 bucks a month for access for even a billion users won’t do it. I know the goal is in industrial application and to become internet like but it still doesn’t work. What is more, they expect to need constant upgrade and expansion at similar cost to the initial investment.
Speaking of don’t look now. Doesn’t it look like Musk is trying to spin up a new hype? Tesla seems to be quietly dying in the car building business. I suppose it will be robots next.
It surely seems so. Even China is being a bit blindsided by little Vietnam making EVs cheaper than them. I wager this is our modern day Tulip mania.
Being no fan of "climate change" and EVs, LLMs and the BS about artificial intelligence, as well as being skeptical of much, I don't become enthused by the "latest." For this, my bride and I missed out on our 'vaccinations', on our chance to buy an 'EV', and so much more. To us, the marketing of "imaginary" and "promises" and more are the lovely imagery of "buy my snake oil, but be sure to not buy his."
We looked at bringing in a translation AI for our Call Center and the demos were flawless. After spending 2-3 months on Spanish, we gave up as there are about another 70-80 languages to go. Someday it may get there but not today.
As do I. Not much of an Excel expert but I was working the other day with a spreadsheet of phone numbers that weren’t formatted and rather than Googling how to do it in Excel, just asked Copilot to go to column H and format as a phone number and it did it in about 30 seconds. It has its place.
My son says I am a journeyman Curmudgeon. I respond that he is my budding apprentice.
My skepticism has led me to miss out on very little that was good for me.
Lovely. Award your son an additional point. :)
I need to remember that.
-SB
You’re a lot smarter than I am but even I get it but I’ve been in the software industry for 40 years this year. Still working too, I started young, I’m 61 now.
Financially AI feels like August of 1929.
-SB
Probably not. I’m interested that so many that are at least partly on the inside of code and such have so many negatives about AI. I suspect, as with most things, there is some preservation bias in the assessment.
The problem these days is finding a credible, honest and objective assessment of anything in all the maze of opinions that anyone gets to publish.
I doubt all of AI goes broke outright but I think there will be instances of Compaq computers in the number of entrants right now. Picking the ones that are successful will be the challenge for investors. Somebody will survive. Just a few will reap the benefits of the losses of several. Lots of successful ventures have been built on the backs of others who lost everything.
My fear is someone will figure out how to use AI to bring the Internet to a standstill.
and the 5% that made money are the ones that sold AI to the 95% who didn’t make money ...
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