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Friday, May 9, 2025
Mugglehead Investment Magazine
Alternative investment news based in Vancouver, B.C.
3/10 generative AI projects will be scrapped by end of next year, Gartner says
3/10 generative AI projects will be scrapped by end of next year, Gartner says
Gartner kicked off its Data & Analytics Summit in Sydney, Australia on Monday. Image credit: Gartner Inc

AI and Autonomy

3/10 generative AI projects will be scrapped before 2026, Gartner says

“Costs aren’t as predictable as other technologies,” one of the firm’s analysts noted

Over 30 per cent of the world’s current generative AI projects will end up becoming lemons after proof of concept assessments.

That is according to the major market research firm Gartner Inc (NYSE: IT), which expects them to be abandoned by the end of next year. Gartner made the prediction Monday in a news release.

The firm’s assessment came on the same day that its annual Data & Analytics Summit kicked off in Sydney, Australia.

“After last year’s hype, executives are impatient to see returns on GenAI investments,” Gartner’s research chief Rita Sallam said at the event, “yet organizations are struggling to prove and realize value.”

The costs associated with generative AI projects are more unpredictable than other technologies, she explained. Sallam also described how many organizations have been struggling to justify investments in the technology for productivity purposes. The financial benefits can be difficult to quantify in the short term.

“Often, the impact may not be immediately evident and may materialize over time,” Sallam said.

However, a recent survey conducted by the market researcher among companies that had integrated the tech into their operations for a significant amount of time found that there were tangible benefits. Specifically, respondents reported a 15.8 per cent increase in revenue and 15.2 per cent reduction of expenses.

Read more: VERSES AI levels up with global standards for intelligent system interoperability

Read more: Illustrious market research firm Gartner recognizes VERSES AI for its innovation

‘There is no one size fits all with GenAI’

Sallam says expenses, risks, variability and strategic impact differ greatly among different types of generative AI projects too.

The costs associated with different deployment approaches among businesses can range from anywhere between US$750,000 to US$20 million.

Table: Gartner

Gartner recognizes FPAI contributors

Earlier in July, Connecticut’s research giant published its Hype Cycle for Artificial Intelligence Report. In it, Gartner praised companies excelling with different areas of the AI sector.

One notable niche within the broader industry discussed was First Principles AI (FPAI).

“FPAI helps train models with fewer data points and accelerates the training process, helping models converge faster to optimal solutions,” Gartner explained.

Tech developers excelling with FPAI that were recognized in the report included the major chip developer NVIDIA Corp (Nasdaq: NVDA) and VERSES AI Inc. (CBOE: VERS) (OTCQB: VRSSF), creator of the Genius platform.

Artificial intelligence, and generative AI in particular, is one of Gartner’s most extensively researched topics.

 

VERSES AI is a sponsor of Mugglehead news coverage 

 

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