I absolutely loved this story. From Fortune via Yahoo Sheryl Estrada reports on an MIT study that found that 5% of generative AI pilots at companies are failing:
Good morning. Companies are betting on AI—yet nearly all enterprise pilots are stuck at the starting line.
The GenAI Divide: State of AI in Business 2025, a new report published by MIT’s NANDA initiative, reveals that while generative AI holds promise for enterprises, most initiatives to drive rapid revenue growth are falling flat.
Despite the rush to integrate powerful new models, about 5% of AI pilot programs achieve rapid revenue acceleration; the vast majority stall, delivering little to no measurable impact on P&L. The research—based on 150 interviews with leaders, a survey of 350 employees, and an analysis of 300 public AI deployments—paints a clear divide between success stories and stalled projects.
I’m still trying to access the study itself. I’ll post on it when (if) I do.
95% is a remarkably consistent outcome. Based on the article most companies are trying to implement their own gAI solutions and failing at it. From my experience that’s either due to unrealistic expectations, mismanagement, or both and I don’t find it a bit surprising. It’s very much where companies were with respect to personal computers and networking in 1990. They thought it should be improving their bottom lines but it wasn’t.
It wasn’t the Internet that changed that; it was adoption of an operating system (Windows 95) that was more-or-less stable and was Internet-ready that changed it. Of course, that transition cost a substantial amount of money.
It’s possible that today’s managers are prepared to spend a lot of money when the right gAI framework comes along but I doubt it. Judging by the reported findings of this study that’s exactly what’s happening. I think they’re a lot more likely just to lay off a lot of people in the hopes that gAI will replace them.
And if the gAI doesn’t work, they’ll hire a bunch on Indians.
He certainly has a point of view. I find it odd that he pays little attention to the desires of the Ukrainians and kind of cherry picks the history that he likes. He completely ignores (will admit I got bored and skimmed over last third fo the piece) the 30s-50s where the Soviets both perpetuated the famine that killed millions and directly killed another millions, deported thousands and kidnapped hundreds of thousands of Ukrainian children. Again, many of the Ukrainians deported were replaced with ethnic Russians.
Anyway, he has strong views about the attempts to bring Ukraine into NATO but prior to the Russian invasion there was never anything close to a unanimous agreement and they never even received a MAP. Note that the Bucharest summit, maybe the strongest attempt was in 2008. What was much more time adjacent were attempts in the couple of years before Russia invaded to form stronger economic ties to the EU.
Steve
Update
Steve, I took the liberty of copying this comment into the “How We Got Here” thread where I think it belongs.
Link to paper. You will find it in files on the left.
https://github.com/aidecentralized/nandapapers/blob/main/v0.1%20State%20of%20AI%20in%20Business%202025%20Report.pdf
Steve
If that doesnt work go to link at bottom of this piece and follow link. (I think maybe I mentioned that my daughter took some courses at MIT so she can usually get me access. If she cant one of her best friends and roommates is in grad school there, computer engineering of some kind related to AI. However, she is leaving and moving back to Europe as DOGE cut funding and I guess she is also now seen as a security risk. Smart kid, international math olympiad winner.
Steve
https://virtualizationreview.com/articles/2025/08/19/mit-report-finds-most-ai-business-investments-fail-reveals-genai-divide.aspx
Thanks, Steve. I’ll take a look at it.
Both of those links give me a “404 Not Found”.
I went and looked again and now they give me 404. Must be one of those sites where you get a free look and then you have to join. I only skimmed it as it was pretty long. Didnt seem like anything earth shattering.
Steve