AI Project Failures Surge to 42% as Companies Struggle to Scale
CIODive
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Contributed by: Kate Gamble
Summary
A report from S&P Global Market Intelligence indicates a sharp rise in AI project failure rates, with 42% of companies expected to abandon their AI initiatives in 2025, up from 17% in 2024. The analysis, based on a survey of over 1,000 respondents in North America and Europe, reveals that organizations are discarding an average of 46% of AI proof-of-concepts before implementation due to challenges like high costs, data privacy issues, and security risks. While AI adoption is increasing, especially in IT operations and customer experience, many firms struggle to scale pilot projects to full production. Experts suggest that successful AI integration depends on focusing on tailored use cases rather than pursuing all opportunities, emphasizing the importance of identifying when AI is the right solution.
