Businesses won't get to see big returns on AI for at least a few more years — but many projects will just be abandoned
GenAI projects aren’t being seen through
![A hand reaching out to touch a futuristic rendering of an AI processor.](https://cdn.mos.cms.futurecdn.net/cuJ2nHdA2cLngX4bhsHsye-320-80.jpg)
New research from Gartner has claimed around a third (30%) of generative AI projects will be abandoned by 2025.
The firm predicted such projects will be ditched after proof-of-concept phase due to challenges such as poor data quality, inadequate risk management, escalating costs and unclear business value.
Gartner’s research also indicates that companies could be slow to see tangible returns from their AI investments, which could be fuelling dwindling interest in projects.
GenAI projects are ditched too early
Distinguished VP Analyst Rita Sallam highlighted the growing impatience among execs: “After last year's hype, executives are impatient to see returns on GenAI investments, yet organizations are struggling to prove and realize value. As the scope of initiatives widen, the financial burden of developing and deploying GenAI models is increasingly felt.”
One of the significant hurdles organizations face is justifying the substantial investment in GenAI for productivity gains, which can be difficult to translate into financial benefits.
Moreover, GenAI deployments typically come with high costs, ranging from $5 million to $20 million. Sallam commented on the variability between organizations, alluding to different objectives and sectors: “there is no one size fits all with GenAI, and costs aren’t as predictable as other technologies.”
Despite sizeable challenges, early adopters are already reporting many benefits. According to data collected by Gartner between September and November 2023, respondents reported an average of 15.8% revenue increase, 15.2% cost savings, and 22.6% productivity improvement.
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However, with “everyday AI” still around two years away, according to the researchers, real productivity gains are far from being realized, and initial concerns that AI could replace human workers are looking less likely.
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With several years’ experience freelancing in tech and automotive circles, Craig’s specific interests lie in technology that is designed to better our lives, including AI and ML, productivity aids, and smart fitness. He is also passionate about cars and the decarbonisation of personal transportation. As an avid bargain-hunter, you can be sure that any deal Craig finds is top value!