MIT Study Reveals 95 Percent of Generative AI Pilots Fail in Businesses
A new study by MIT finds that 95 percent of generative AI implementations in companies are failing, raising concerns about the AI investment bubble.
AI Investment Boom Meets Reality Check
With AI dominating enterprise discussions, companies and investors are pouring unprecedented funds into the technology. In the first half of 2025, AI startups raised over $44 billion, surpassing all of 2024. A Goldman Sachs analysis predicts global AI investments will near $200 billion by year-end.
However, this spending spree may be misguided. A new MIT report, first covered by Fortune, reveals that 95% of generative AI implementations in businesses are failing. Titled "The GenAI Divide: State of AI in Business 2025," the study found only 5% of companies achieve "rapid revenue acceleration" with AI.
Why AI Falls Short
Despite being marketed as an autonomous assistant for white-collar workers, AI struggles with real-world tasks. As of July, the best AI tools completed just 30% of assigned office tasks, far below expectations. This contrasts sharply with earlier projections that AI would contribute $6 trillion to the global economy by 2030.
The Looming AI Bubble
A MoneyWeek analysis warns that without transformative productivity gains, the AI bubble could burst. Top tech firms, expected to generate $600 billion in annual AI revenue, are currently projected to earn just $35 billion. The gap between hype and reality grows yearly, increasing pressure for a breakthrough.
Experts now question whether the AI boom is sustainable, with some predicting a disastrous impact on the broader economy if the bubble bursts.
Related: Companies That Replaced Humans With AI Are Realizing Their Mistake
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About the Author
Dr. Emily Wang
AI Product Strategy Expert
Former Google AI Product Manager with 10 years of experience in AI product development and strategy formulation. Led multiple successful AI products from 0 to 1 development process, now provides product strategy consulting for AI startups while writing AI product analysis articles for various tech media outlets.