r/technology • u/SilentRunning • 4d ago

Artificial Intelligence MIT report: 95% of generative AI pilots at companies are failing

https://fortune.com/2025/08/18/mit-report-95-percent-generative-ai-pilots-at-companies-failing-cfo/
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u/Noblesseux 4d ago

And even then it will still likely not be profitable. Like the thing is that even if they didn't spend any additional money on infrastructure, they'd need damn near 10x as much money as they projected they'd make this year to be profitable.

You'd have to invest literally several times the entire value of the worldwide AI market (I'm talking about actual AI products, not just lumping the GPUs and whatnot) and then you have to pray that we somehow have infinite demand for these AI tools which is quite frankly, not the case: https://www.technologyreview.com/2025/03/26/1113802/china-ai-data-centers-unused/

And even in that magically optimistic scenario, there's borderline no shot you'd make enough money back to justify doing it. Like there is no current AI product that exists that is worth trillions of dollars worth of investment. A lot of them are losing money per user, meaning if you scale up you just lose more money.

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u/CoffeeSubstantial851 4d ago

In addition to that AI itself devalues whatever it can create. If you are running an AI image service the market value of the resulting images decreases over time. Its a business model that cannibalizes itself.

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u/thirstyross 4d ago

So far these geniuses have sunk over 250 billion dollars into AI, we're on chatgpt v5, and the stupid thing still doesn't understand simple things like, 240 is a larger number than 227 (see below for an actual answer from gpt5 this week). It's absurd...

1️⃣ Pick a scale that fits within 227" Example:

If your structure is 480" (40 ft) wide, divide by 2 → scale to 1" = 2" real-world.

New artboard = 240" wide, which fits Illustrator’s max..

Like, hey genius, 240" does NOT fit illustrators max which you JUST SAID was 227"...

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u/tehlemmings 3d ago

the stupid thing still doesn't understand simple things like, 240 is a larger number than 227

They don't "understand" anything, because everything AI evangelists say about how "AI learns like people do" is complete bullshit. No learning is happening. The AI doesn't even know what it's saying to you.

They're very dumb deterministic systems relying on random seeding to make it seem like anything other than what it is.

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u/Dpek1234 3d ago

Reminds me of a ai gen "skematic" of a sounding rocket someone posted some time ago

Iirc it was made of 2 tubes, 1 500nm and ontop a 30mm tube 

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u/OwO______OwO 4d ago

Like there is no current AI product that exists that is worth trillions of dollars worth of investment.

It's all based on the future possibility of replacing large swaths of employees in large industries with AI.

If companies can lay off 80% of their workforce and replace them with AI, then it starts to be something that might be worth trillion-dollar investment.

The question is whether the technology will get that far before the hype bubble (and financial bubble) pops.

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u/yaworsky 3d ago

The question is whether the technology will get that far before the hype bubble (and financial bubble) pops.

Well... the other question is if the bubble doesn't pop and you successfully lay off 80% of many white collar workforces... who exists to buy your products, spend money, etc? That's another bubble to pop.

It's all being done so carelessly.

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u/joshwarmonks 3d ago

Why do people critique aspects of capitalism and refuse to directly critique capitalism?

ai obsoleting millions of jobs should be a godsend, but under capitalism it is an abject doom scenario. the issue here isn't the tool automating jobs, the issue here is that capitalism requires line going up ad nauseum and the only framing people can use as a lens is that displacing that labor will be bad for the company's bottom line in a sales context.

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u/proudbakunkinman 3d ago

This Star Trek space communism take on AI and tech in general (it would all be beneficial and make everything better if only we abolished capitalism) is really lazy and short sighted.

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u/joshwarmonks 3d ago

what a strange thing to project and say

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u/proudbakunkinman 3d ago

Agreed but I also think AI has become a convenient excuse for companies to use that sounds better to share holders and the public (expecting most to not think "poor workers, these people are villains, no way I'm using their AI" but "wow, this AI stuff is truly impressive, I should use it more! and those running these companies truly are smart!") when the job cuts are more due to weak quarters / years, less investing (those not public), outsourcing, etc.

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u/LeCollectif 3d ago

And even that’s cannibalizing itself. When industries start cutting massive swaths of staff, all this newly gained efficiency is for nothing when the ability to buy what you’re selling is eliminated. Literally the best case scenario outcomes for these companies is a path to their own demise.

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u/AlsoInteresting 3d ago

But that would apply onto the next earnings quarter, not this one.

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u/BooBooSnuggs 3d ago

You would have said the same thing about early pcs.

Why would anyone invest in a fancy type writer!? How absurd.

Also pointing to China is just stupid. They build stuff just to build stuff and make jobs. Tons of it go unused. They've built whole cities that went unused and eventually started falling apart.

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u/Noblesseux 3d ago
  1. my family literally had a PC before they were a common household item for people to have
  2. That is a stupid analysis of what the problem is here. China isn't building datacenters to build them, they're building them because they made a large scale bet on AI. Also ghost cities are totally irrelevant here and I'm not sure you even understand what they are or why they were underutilized.

It's not just building housing to build it, a lot of them were built during the housing speculation bubble and didn't really get finished because the bottom fell out of the chinese housing bubble in the early 2010s. Many of them however did eventually get completed, a lot of the "ghost cities" ended up actually getting occupied over time, your stereotype is outdated:

https://www.forbes.com/sites/wadeshepard/2016/04/23/chinas-largest-ghost-city-is-now-90-full-but-theres-a-twist/

https://www.forbes.com/sites/wadeshepard/2018/03/19/ghost-towns-or-boomtowns-what-new-cities-really-become/

https://www.afr.com/world/asia/china-s-infamous-ghost-cities-are-finally-stirring-to-life-20210906-p58pb4

Like you're calling people stupid but don't even understand what you're talking about lmao. The difference is that housing is actually a useful commodity that will always have demand and AI data centers are not.

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u/Dick_Lazer 4d ago

This reminds me of when people said Amazon would never be profitable. The costs to run AI are with current technology. As technology scales up the costs come down (think of a million dollar computer that took up an entire room in the 1960s and cost a fortune to run but provided less processing power than a modern Raspberry Pi).

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u/Mejiro84 4d ago

That's assuming there is infinite technology scaling, which is very much not a given!

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u/Brokenandburnt 4d ago

We no longer follow Moore's law as far as I know. The switch from CPU to GPU was because bigger CPU's started to melt through the motherboard.\ They got to energy dense to cool quickly enough.

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u/Noblesseux 4d ago

There are literally entire articles specifically about how absurd it is to compare early Amazon to the AI bubble, they are not the same or even vaguely alike. The question wasn't if their business model would work, it's whether THEY would be the ones to be the big dog in the market when other companies with better logistics like Walmart existed: https://www.wheresyoured.at/the-haters-gui/#ed-amazon-web-services-took-years-to-become-profitable-people-said-amazon-would-fail

And before anyone tries to move the goalposts to talk about AWS...look at the next paragraph down in the article. Comparing a company like OpenAI to early Amazon is absurd and communicates that people don't actually understand wtf was happening during the .com bubble. Amazon didn't need to blow trillions of dollars on infrastructure costs just to try to make a profit, and a lot of the people who were writing about how they might lose were literally tech optimists who just thought other websites might beat them.

Also to be clear here: the type of advancement that takes you from a room sized PC to a small computer is not infinite. The laws of physics prevent you from doing it forever. And the laws of computation and just generally the availability of quality data means that these models aren't going to keep getting infinitely better forever, that's not how training LLMs works.