Gartner Predicts 30% of GenAI Projects Will Be Abandoned by 2025 Due to Insufficient ROI

Gartner Predicts Generative AI (GenAI) Backlash and Abandonment of Projects: Concerns Over ROI and Financial Burden

The rise of generative AI (GenAI) has been a hot topic in the tech world, with many companies investing heavily in projects to harness its potential. However, a recent prediction by Gartner has thrown a curveball into the mix, forecasting a backlash against GenAI in the next 18 months.

During Gartner’s Data & Analytics Summit in Sydney, the company outlined concerns around poor data quality, substandard risk controls, and escalating costs that are plaguing GenAI projects. The research organization believes that at least 30% of GenAI projects will be abandoned after proof of concept by the end of 2025, citing difficulties in proving return on investment (ROI) as a major issue.

The financial burden of developing and deploying GenAI models is increasingly felt by organizations, with upfront investment and recurring costs proving to be significant hurdles. Rita Sallam, Distinguished VP Gartner Analyst, highlighted the challenges in estimating the exact value of GenAI projects, as benefits are often specific to individual companies and use cases.

Despite the potential benefits of GenAI in sectors like customer service and experience, Gartner warns against overreliance on automation technology to replace human agents. Instead, investing in employee enablement technology is seen as a more beneficial strategy for both customer satisfaction and company profitability.

Gartner’s predictions for the future of AI in customer service paint a bleak picture, with warnings against relying solely on digital solutions and potential customer harm from AI advancements. The rise of autonomous agents in GenAI is expected to have major applications in various sectors, but concerns around misinformation and customer safety remain prevalent.

As organizations navigate the complexities of GenAI implementation, it is crucial to carefully consider the costs, risks, and strategic impact of such projects. While the potential benefits of GenAI are vast, the road to realizing value may be more challenging than initially anticipated. It will be interesting to see how companies adapt to Gartner’s predictions and navigate the evolving landscape of AI technology in the coming months.

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