"The alarms and flashing red lights are warning we're in an AI bubble. Hundreds of billions of dollars are being invested in the technology by Microsoft, Google, Amazon, Meta, Nvidia, Intel, and generative AI (genAI) startups like Anthropic, OpenAI, and others. More and more, economists, analysts, and even tech companies worry: What if the genAI bubble will be the biggest tech bust of all time?"
"A McKinsey report warns: "Nearly eight in 10 companies report using gen AI - yet just as many report no significant bottom-line impact. Think of it as the 'genAI paradox.'" An MIT report, The GenAI Divide: State of AI in Business 2025, adds that 95% of genAI pilots in businesses are failing. And the data and analytics firm S&P Global is warning that 42% of companies abandoned most of their AI pilots by the end of last year, up 17% from 2023."
Experts warn that current AI spending levels may be unsustainable as hundreds of billions flow into generative AI from major tech firms and startups. Many companies report little to no bottom-line impact despite widespread adoption, and large shares of genAI pilots are failing or being abandoned. Critics argue that vast sums could be better targeted to specific, high-value areas such as medical research. Microsoft and several other big tech firms are continuing to increase AI investments and emphasize customer demand and spending plans on recent earnings calls.
Read at Computerworld
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