Brace yourselves for the “Trough of Disillusionment.”
Flash in the Pan
When OpenAI first released ChatGPT to the public back in late 2022, many people in business were gripped with an intense case of FOMO and started trying to stuff AI into practically everything, from customer chatbots to facial recognition in stadiums.
It was all done with an eye to increase efficiency and profit. But that may not have quite panned out: an AI company called Lucidworks released a new report on generative AI this week that revealed that many businesses aren’t seeing much in financial returns from their adoption of AI products.
“In 2023, global leaders expected to see significant positive impacts across business operations, automation and efficiency, and customer experience with generative AI initiatives,” the report reads, “Unfortunately, the financial benefits of implemented projects have been dismal. 42 percent of companies have yet to see a significant benefit from their generative AI initiatives.”
Deploy Guys
One reason the study found that companies aren’t realizing much in profit is because AI initiatives — a full 25 percent, in fact — haven’t been fully deployed. Why? The study found that many of these AI programs are still stuck in beta mode and aren’t quite ready to be used in the everyday.
On top of that, companies are often drastically pulling back their spending on AI products due to data security concerns, hallucinations, and the high cost to run these platforms.
Researchers at Lucidworks gathered survey responses from over 2,500 business heads in North America, Europe, Middle East, Africa, and the Asia-Pacific region for this study, and found that only 63 percent are planning spending increases on AI products this year. That’s a swift drop from last year, when 93 percent of surveyed companies were planning to increase their spending on AI.
Another telling data point: this year, 36 percent of companies are planning to keep their spending on AI products “flat” versus 6 percent last year.
If we track the buzz of AI to the Gartner hype cycle, it looks like we are about to crest the “Peak of Inflated Expectations” and we will be plunging down any moment on a steep slope aka the “Trough of Disillusionment.”
This was fairly predictable. There’s a big chasm between investment dollars pouring into the space and profit being generated, as pointed out by outlets like The Washington Post. We maybe inside a bubble that’s already deflating.
Anyway, maybe this ice cold bucket of realism crashing down on the heads of CEOs will prevent them from making breathless predictions on what AI will be able to do and instead evaluate what it can actually do right now.
More on AI: Experts Concerned by Signs of AI Bubble
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