A study released last week by MIT's NANDA initiative found that 95% of generative Artificial Intelligence (AI) projects at corporations are delivering little to no measurable impact to the bottom line.
The report indicated that $30-$40 billion has been invested in AI projects at companies but only 5% are seeing meaningful returns from that investment.
An article on the MIT report by The Hill summarized the conclusions this way.
Many companies are implementing tools like OpenAI’s ChatGPT and Microsoft Copilot, with over 80 percent having explored or piloted these technologies, and nearly 40 percent reporting their deployment. However, these tools primarily function to enhance individual productivity rather than contribute to overall company earnings.
Most times, AI integration fails to contribute to profits “due to brittle workflows, lack of contextual learning, and misalignment with day-to-day operations,” the MIT report reads.
The AI systems are unable to learn and think in ways humans can, as “most GenAI systems do not retain feedback, adapt to context, or improve over time,” it continued.
Last week also saw Open AI CEO Sam Altman (that runs ChatGBT) state that he is concerned about an AI bubble forming as spending on the industry surges.
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| Source: https://www.cnbc.com/2025/08/18/openai-sam-altman-warns-ai-market-is-in-a-bubble.html |
Altman warned that some are going to get burned in a big way when the bubble bursts.
“When bubbles happen, smart people get overexcited about a kernel of truth,” Altman told a small group of reporters last week.
“Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes. Is AI the most important thing to happen in a very long time? My opinion is also yes,” he was quoted as saying.
Altman appeared to compare this dynamic to the infamous dot-com bubble, a stock market crash centered on internet-based companies that led to massive investor enthusiasm during the late 1990s. Between March 2000 and October 2002, the Nasdaq lost nearly 80% of its value after many of these companies failed to generate revenue or profits.
It will not be the first (or last time) that human beings have let their emotions outpace reality.
Famous bubbles in the past resulted from the introduction of railroads, radios and the internet.
Of course, the most insane bubble of all time goes back to the Tulipmania bubble in Holland in the 1600's which followed the introduction of tulips to Europe.
If you are not familiar with the Tulipmania story I recommend you read my blog post on the subject that I wrote a decade ago.
There is little question in my mind that AI will be transformative. However, it remains to be seen exactly who will benefit and the extent of that value.
One thing seems likely as to those who are benefiting the most from AI in the short term.
Consider this chart that shows the usage of ChatGPT over the last couple of years.
Usage seemed to drop each summer when school was out.
Students seems be using AI quite a bit.
A report last year found of college papers reviewed by a plagiarism detection service that 22 million papers (11% of the sample that were turned in) used AI to generate at least 20% of the paper.
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| Source: https://qz.com/how-many-students-use-ai-write-papers-1851407205 |
Is it just a coincidence that the only decreases in the meteoric rise of ChatGPY usage coincides with the end of high school and college academic calendars?
If AI is being used to any significant degree by students it also raises the additional question of whether the short-term benefit they receive from AI will be offset by the long-term reality that they are ill-equipped to think on their own in the future?
That also forms the underlying question I have about AI in general.
Will it be one of the greatest advances in the history of humanity or mark its end?
We are in for some very interesting times in the future and it is coming at us very fast.
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