AI billions are wasted: Why companies fail and have to learn!

AI billions are wasted: Why companies fail and have to learn!

In recent years, US companies have invested between $30 and $40 billion in artificial intelligence (AI). Despite these massive financial resources, a current study by the Media Lab at the Massachusetts Institute of Technology (MIT) shows that around 95 percent of AI projects do not achieve the expected economic success. These findings are based on the evaluation of 300 publicly known AI initiatives as well as 52 interviews with companies and feedback from over 150 executives at industry conferences, such as IT Daily reported.

A pattern that emerges again and again is the tendency of companies to jump too quickly into new technologies without addressing specific business problems. Andrea Hill, a US consultant and founder of Hill Management Group, highlights that much of the investment is going into pilot projects, particularly in the areas of marketing and sales. This includes applications such as automated email texts, chatbots and content creation.

Challenges and failures

Decision makers are often faced with the challenge of clearly communicating the benefits of AI applications in more complex areas such as finance, procurement or operations. The attractiveness of marketing tools is based on the assumption that customer relationships can be shaped by quick answers and correct grammar. In practice, however, the opposite is often the case: frustrating chatbots and inappropriate mailings lead to visible failures in customer contact.

The MIT study highlights that less noticeable application areas such as back-office automation, finance and procurement deliver the greatest efficiency gains. Apparently, the economic benefits of AI depend crucially on whether the technology is used for specific business problems. A better understanding of the application areas could help increase the success of investments in AI.

Artificial intelligence in journalism

Parallel to the challenges in the corporate sector, media companies are also experiencing change through the use of AI. According to the Reuters Institute study “Journalism and Technology – Trends and Predictions 2025,” 87 percent of newsrooms expect fundamental changes in the way they work through generative AI. Especially in view of declining reach, economic pressure and regulatory uncertainty, many media companies are looking for AI-supported innovations to overcome these challenges Refa determines.

Potential applications in journalism include automated news translations and personalized news experiences. In this context, collaborations with AI providers such as ChatGPT are becoming increasingly important. Licensing agreements could not only open up new revenue streams, but also provide greater access to advanced AI technologies, further driving the transformation of the media industry.