An Enigma for AI Adoption
If the tech hype has been punctured, I couldn’t find a single company willing to talk about it.
Credit: Article by James O’Donnell, originally published in MIT Technology Review Brasil.
A few weeks ago, I started what I thought would be a simple reporting journey. After years of momentum for AI, even if you didn’t think it would be good for the world, you probably thought it was powerful enough to be taken seriously. However, the hype around the technology had been slightly punctured. First came the underwhelming launch of GPT-5 in August. Then, a report released two weeks later found that 95% of generative AI pilot projects were failing, causing a brief stock market panic. I wanted to know: which companies were scared enough to cut their AI spending?
I looked and looked for them. As I did, more news fueled the idea of an AI bubble that, if it burst, would mean doom for the entire economy. Stories spread about the circular nature of AI spending, layoffs, and the inability of companies to articulate what exactly AI will do for them. Even the smartest people building modern AI systems said the technology hadn’t progressed as much as its evangelists promised.
But after all my searching, companies that have taken these events as a sign that perhaps they shouldn’t bet everything on AI simply could not be found. Or, at least, none that were willing to admit it. What is going on?
There are several possible interpretations for this reporter’s search (which, for the record, I am presenting as an anecdote and not as a representation of the economy), but let’s start with the simplest. The first is that this is a great victory for those who believe that “AI is a bubble.” What is a bubble, after all, but a situation where companies keep spending non-stop even in the face of worrying news? The other is that, behind the negative headlines, there might not be truly alarming news about AI enough to convince companies that they should change course.
But it is also possible that the unbelievable speed of AI progress and adoption has led me to imagine that industries are more sensitive to the news than they perhaps need to be. I spoke with Martha Gimbel, who leads the Yale Budget Lab and co-authored a report finding that AI hasn’t changed anyone’s job yet. What I realized is that Gimbel, like many economists, thinks on a longer time scale than anyone in the AI world is used to.
“It would be historically shocking if a technology had had an impact as quickly as people thought this one would,” she says. In other words, maybe most of the economy is still trying to figure out what the heck AI actually does, rather than deciding whether to abandon it.
The other reaction I heard — especially from consulting staff — is that when executives hear that so many AI pilot projects are failing, they do take it very seriously. They just don’t interpret it as a failure of the technology itself. Instead, they point to pilots that aren’t moving fast enough, companies that don’t have the right data to build better quality AI, or a host of other strategic reasons.
Even though there is enormous pressure, especially on publicly traded companies, to invest heavily in AI, some have taken big swings with the technology only to pull back later. The “buy now, pay later” company Klarna laid off employees and froze hiring in 2024, claiming it could use AI instead. Less than a year later, it was hiring again, explaining that “AI gives us speed. Talent gives us empathy.”
Drive-thru chains, from McDonald’s to Taco Bell, have ended pilot projects testing the use of AI-based voice assistants. The vast majority of Coca-Cola’s advertisements, according to experts I spoke with, are not made with generative AI, despite the company’s $1 billion promise.
For now, therefore, the question remains unanswered: are there companies rethinking how much — or when — their AI bets will pay off? And if they do exist, what stops them from speaking about it out loud?
