Businesses won't get to see big returns on AI for at least a few more years but many projects will just be abandoned

Date:
Fri, 16 Aug 2024 14:26:10 +0000

Description:
Challenges like poor data quality and costs, together with slow ROI, is leading many businesses to ditch AI projects.

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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.

Gartners 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 arent 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.

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. More from TechRadar Pro Check out the best AI tools and best AI writers Consider giving your employees access to the best productivity tools Businesses are willing to pay more to hire people with the right AI skills



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Link to news story: https://www.techradar.com/pro/businesses-wont-get-to-see-big-returns-on-ai-for -at-least-a-few-more-years-but-many-projects-will-just-be-abandoned


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