"GenAI FOMO has spurred businesses to light nearly $40 billion on fire"

From The Register, August 18:

US companies have invested between $35 and $40 billion in Generative AI initiatives and, so far, have almost nothing to show for it.

According to a report [PDF] from MIT's NANDA (Networked Agents and Decentralized AI) initiative, 95 percent of enterprise organizations have gotten zero return from their AI efforts.

Only 5 percent of organizations have successfully integrated AI tools into production at scale.

The report is based on 52 structured interviews with enterprise leaders and on analysis of more than 300 public AI initiatives and announcements, and a survey of 153 business professionals.

The report authors – Aditya Challapally, Chris Pease, Ramesh Raskar, and Pradyumna Chari – attribute this GenAI Divide not to insufficient infrastructure, learning, or talent, but to the inability of AI systems to retain data, to adapt, and to learn over time. 

"The GenAI Divide is starkest in deployment rates, only 5 percent of custom enterprise AI tools reach production," the report says. "Chatbots succeed because they're easy to try and flexible, but fail in critical workflows due to lack of memory and customization."

As an unidentified CIO put it in an interview with the authors, "We've seen dozens of demos this year. Maybe one or two are genuinely useful. The rest are wrappers or science projects."

The authors' findings echo other recent research showing a decline in confidence about AI initiatives among corporate leaders.

The NANDA report does say that a small percentage of companies have found GenAI helpful and that the technology is having a material impact on two out of nine industrial sectors – Technology and Media & Telecom. 

For the remaining sectors – Professional Services, Healthcare & Pharma, Consumer & Retail, Financial Services, Advanced Industries, and Energy & Materials – Generative AI has been inconsequential.

An unidentified COO at a mid-market manufacturing firm is quoted as saying, "The hype on LinkedIn says everything has changed, but in our operations, nothing fundamental has shifted. We're processing some contracts faster, but that's all that has changed."

One thing that is changing is the employment landscape, at least in affected industries. In the Technology and Media sectors, the report notes, "[more than] 80 percent of executives anticipate reduced hiring volumes within 24 months."

According to the authors, the GenAI-driven workforce reductions have been occurring in non-core business activities that often get outsourced, such as customer support operations, administrative processing, and standardized development tasks.....

....MUCH MORE 

Is that all you've got?
As noted introducing "The ChatGPT revolution is another tech fantasy"
This stuff, chatbots and generative AI, is not the artificial intelligence that actually matters. What matters is the AI that's behind the scenes.

 

And "We’re Still Waiting for the Next Big Leap in AI":
Large Language Models are not the be-all and end-all of Artificial Intelligence. At best they are regurgitators of accumulated human knowledge. The future of generative AI is at present unknown and probably unknowable. (think AI using AI to train AI)*

 

And the 95/5? See also hyper Pareto distribution:

The Hyper-Pareto Distribution Of Profits Is Happening Right Now (plus an anniversary)