{"id":29579,"date":"2025-03-19T14:41:40","date_gmt":"2025-03-19T21:41:40","guid":{"rendered":"https:\/\/essential.construction\/news\/ai-project-failure-rates-are-on-the-rise-report\/"},"modified":"2025-03-19T14:41:40","modified_gmt":"2025-03-19T21:41:40","slug":"ai-project-failure-rates-are-on-the-rise-report","status":"publish","type":"post","link":"https:\/\/essential.construction\/news\/ai-project-failure-rates-are-on-the-rise-report\/","title":{"rendered":"AI project failure rates are on the rise: report"},"content":{"rendered":"<p> [ad_1]<br \/>\n<\/p>\n<div>\n<h3>Dive Brief:<\/h3>\n<ul>\n<li><span><span><span><span><span><span>More enterprises reported AI project failures this year compared to 2024, according to analysis from <\/span><\/span><\/span><\/span><\/span><\/span><span><span><span><span><span><span><span>S&amp;P Global Market Intelligence<\/span><\/span><\/span><\/span><\/span><\/span><\/span><span><span><span><span><span><span>. The findings are based on a survey of <\/span><\/span><\/span><\/span><\/span><\/span><span><span><span><span><span><span><span>more than 1,000 respondents<\/span><\/span><\/span><\/span><\/span><\/span><\/span><span><span><span><span><span><span> in North America and Europe.<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<li><span><span><span><span><span><span>The share of companies abandoning most of their AI initiatives jumped to <\/span><\/span><\/span><\/span><\/span><\/span><span><span><span><span><span><span><span>42%<\/span><\/span><\/span><\/span><\/span><\/span><\/span><span><span><span><span><span><span>, up from <\/span><\/span><\/span><\/span><\/span><\/span><span><span><span><span><span><span><span>17%<\/span><\/span><\/span><\/span><\/span><\/span><\/span><span><span><span><span><span><span> last year. The average organization scrapped <\/span><\/span><\/span><\/span><\/span><\/span><span><span><span><span><span><span><span>46%<\/span><\/span><\/span><\/span><\/span><\/span><\/span><span><span><span><span><span><span> of AI proof-of-concepts before they reached production.\u00a0<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<li><span><span><span><span><span><span>Companies cited cost, data privacy and security risks as the top obstacles, S&amp;P found. So far, AI adoption is predominantly found in IT operations, followed by customer experience workflows and marketing processes.\u00a0<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<h3>Dive Insight:<\/h3>\n<p><span><span><span><span><span><span>Enterprises are grappling with a long list of persistent roadblocks and speed bumps related to their AI initiatives.\u00a0<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>CIOs thought their <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.ciodive.com\/news\/generative-ai-experiments-fail\/707561\/\" target=\"_blank\"><span><span><span><span><span><span><span><span>organization\u2019s progress with generative AI<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> <\/span><\/span><\/span><\/span><\/span><\/span><span><span><span><span><span><span><span>wasn\u2019t up to par in 2023<\/span><\/span><\/span><\/span><\/span><\/span><\/span><span><span><span><span><span><span>, and <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.ciodive.com\/news\/ChatGPT-anniversary-enterprise-strategy-evolution-generative-AI\/732951\/\" target=\"_blank\"><span><span><span><span><span><span><span><span>experiments continued to fail<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> last year. This year will likely bring more scrapped projects.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Nearly all enterprises are increasing generative AI investments, even as<\/span><\/span><\/span><\/span><\/span><\/span><span><span><span><span><span><span><span> two-thirds <\/span><\/span><\/span><\/span><\/span><\/span><\/span><span><span><span><span><span><span>admit to being <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.ciodive.com\/news\/enterprise-generative-AI-ROI-pilot-fail-Informatica\/739485\/\" target=\"_blank\"><span><span><span><span><span><span><span><span>unable to transition pilots into production<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span>, according to an Informatica report published last month.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Successful organizations have made efforts to <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.ciodive.com\/news\/enterprise-generative-AI-ROI-pilot-fail-Informatica\/739485\/\" target=\"_blank\"><span><span><span><span><span><span><span><span>prioritize and customize use cases<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span>. After all, decision-makers who chase every AI opportunity are likely to have more projects fail. Knowing when <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.ciodive.com\/news\/generative-AI-tool-pros-cons-enterprise-strategy\/731613\/\" target=\"_blank\"><span><span><span><span><span><span><span><span>AI is the right tool<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> \u2014 and when it isn\u2019t \u2014 is critical to avoid wasting time on a losing hand.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Failed projects, however, shouldn\u2019t always send a negative signal to business leaders, according to analysts.\u00a0<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cCelebrating failures on some of this matters,\u201d <\/span><\/span><\/span><\/span><\/span><\/span><span><span><span><span><span><span><span>Amanda Luther, managing director and partner at Boston Consulting Group<\/span><\/span><\/span><\/span><\/span><\/span><\/span><span><span><span><span><span><span>, said during <a rel=\"nofollow noopener\" href=\"https:\/\/events.industrydive.com\/events\/generative-ai-where-are-we-now?utm_source=CIO&amp;utm_medium=Dive-Outreach&amp;utm_campaign=Q12025CIODiveLive\" target=\"_blank\">a CIO Dive virtual event<\/a> Wednesday. Allowing employees to surface and pilot use cases they are interested in promotes a culture of experimentation, whether or not the idea makes it to production, she added.\u00a0<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>The exercise can also lead to iterative experimentation and better results down the line.\u00a0<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cWhen people hear the word failure, they freak out about it,\u201d <\/span><\/span><\/span><\/span><\/span><\/span><span><span><span><span><span><span><span>Htike Htike Kyaw Soe, managing director, advisory digital at KPMG U.S.<\/span><\/span><\/span><\/span><\/span><\/span><\/span><span><span><span><span><span><span>, said during the panel. \u201cThere\u2019s a lot of trial and error to this because it&#8217;s a new technology\u2026\u00a0Embracing that is okay.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<\/p><\/div>\n<p>[ad_2]<br \/>\n<br \/><a href=\"https:\/\/www.constructiondive.com\/news\/AI-project-fail-data-SPGlobal\/742934\/\" rel=\"nofollow noopener\" target=\"_blank\">This article was originally posted at Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>[ad_1] Dive Brief: More enterprises reported AI project failures this year compared to 2024, according to analysis from S&amp;P Global &#8230; <a title=\"AI project failure rates are on the rise: report\" class=\"read-more\" href=\"https:\/\/essential.construction\/news\/ai-project-failure-rates-are-on-the-rise-report\/\" aria-label=\"Read more about AI project failure rates are on the rise: report\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[457],"tags":[],"class_list":["post-29579","post","type-post","status-publish","format-standard","hentry","category-construction-dive","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"_links":{"self":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts\/29579","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/comments?post=29579"}],"version-history":[{"count":0,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts\/29579\/revisions"}],"wp:attachment":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/media?parent=29579"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/categories?post=29579"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/tags?post=29579"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}