Top executives have been raising concerns that AI investment and valuations may not be consistent with the eventual returns.
The view that the artificial intelligence (AI) industry is in a “bubble” — characterized by high investment and lower perceived returns over time — has once again gained steam.
On Monday, a former chief strategist at JPMorgan, Marko Kolanovic, reshared a post about an MIT study on generative AI adoption among enterprises, commenting, “Sounds about right for a bubble.”
The view was aired by OpenAI CEO Sam Altman in an interview with The Verge last week. “Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes,” he told the publication, while noting he also believes that AI is the defining tech innovation of our era.
Alibaba co-founder Joe Tsai, Bridgewater Associates’ Ray Dalio, and Apollo Global Management chief economist Torsten Slok have all raised similar warnings, according to a CNBC report.
The study referred to by Kolanovic, published under MIT’s NANDA (Networked Agents and Decentralized AI) research project, noted that only 5% of organizations have successfully integrated AI tools into production at scale, according to the summary of the report published in tech publication The Register. Moreover, 95% have gotten zero return from their AI efforts.
The findings, based on enterprise leader interviews, analysis of public AI initiatives, and a survey of 153 professionals, noted that executives use free GenAI tools for most of their work, and enterprise subscriptions are not being used thoroughly.
The report attributes the slower enterprise adoption to AI systems’ inability to retain data, adapt, and learn over time.
“The GenAI Divide is starkest in deployment rates, only 5 percent of custom enterprise AI tools reach production,” according to the report, quoted in The Register. “Chatbots succeed because they’re easy to try and flexible, but fail in critical workflows due to lack of memory and customization.”
“We’ve seen dozens of demos this year. Maybe one or two are genuinely useful. The rest are wrappers or science projects,” an unidentified chief information officer was quoted as saying.
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