Executives Are Pouring Money Into AI. So Why Are They Saying It's Not Paying Off?
A recent survey by tech giant IBM came to a conclusion that could send shockwaves through Wall Street and the tech sector writ large. The survey asked whether or not company leaders were reporting that their AI initiatives delivered the expected return on investment.
A shockingly small proportion of the surveyed CEOs reported that the tech was delivering on its promises, with only a quarter of the 2,000 respondents answering in the affirmative, while only 16 percent scaled AI across the entire enterprise.
A mere half of the CEO respondents indicated they were realizing value from generative AI investments, indicating the tech may be falling far short of some sky-high expectations and billions of dollars spent.
Tech leaders have long rung the alarm bells about the dangers of fueling an AI bubble, investing in an unproven tech that's still suffering from widespread hallucinations and a propensity to leak potentially sensitive data. As AI models become more powerful, they're also becoming more prone to hallucinating, not less, highlighting that the industry is heading in the wrong direction.
However, company executives are seemingly unperturbed. A whopping 85 percent of the CEOs IBM surveyed expected their investments in AI efficiency and cost savings to return a positive ROI by 2027.
The general fear of being left behind by missing the boat on AI is still rampant.
"At this point, leaders who aren't leveraging AI and their own data to move forward are making a conscious business decision not to compete," IBM vice chairman Gary Cohn wrote in the report. "As AI adoption accelerates, creating greater efficiency, and productivity gains, the ultimate pay-off will only come to CEOs with the courage to embrace risk as opportunity."
But how to leverage AI meaningfully — and convey that vision to workers — is proving extremely difficult.
According to a 2024 Gallup poll, only 15 percent of US employees felt that "their organization has communicated a clear AI strategy." Only 11 percent said they feel "very prepared" to work with AI, a drop of six percent from Gallup's 2023 survey.
Despite pouring tens of billions of dollars into AI investments and supporting infrastructure expansions, companies are still many years out from turning a profit. When, or if, they'll ever get to the point where AI pays for itself remains to be seen.
"Are we using GenAI to solve real problems, or just optimizing slide decks?" Curioser.AI CEO Stephen Klein told Forbes.
In a study commissioned by Microsoft last year, researchers claimed that for every $1 invested in generative AI, companies would realize an average of $3.70 in return, claims that were never externally validated.
How long investors will be willing to prop up an enormous money-burning operation is anybody's guess.
More on generative AI: The US Copyright Chief Was Fired After Raising Red Flags About AI Abuse
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
21 minutes ago
- Yahoo
Cloud Range to Showcase Cutting-Edge Cybersecurity Simulations at 2025 Gartner Security & Risk Management Summit
Industry Leader Highlights Innovations in Cyber Preparedness Training NASHVILLE, Tenn., June 09, 2025--(BUSINESS WIRE)--Cloud Range, the leading enterprise cyber range platform for reducing detection and response times thereby reducing cyber risk, today announced it will showcase its latest innovations in cyber readiness and pre-emptive preparedness at the 2025 Gartner Security & Risk Management Summit, June 9–11 in National Harbor, MD. At the summit, Cloud Range will demonstrate its latest advancements, including the award-winning Range365™ platform—a fully managed, cloud-based cyber range with customizable IT and OT/ICS environments. Range365 strengthens security teams to engage in realistic attack scenarios, directly reducing cyber risk. Additionally, Cloud Range will showcase its Performance Portal, a comprehensive learning management system (LMS) providing detailed analytics on individual and team performance, enabling targeted, continuous skill development aligned to organizational needs. "The Gartner Summit is a pivotal event that brings together the brightest minds in cybersecurity," said Debbie Gordon, CEO and Founder of Cloud Range. "As cyber threats become increasingly sophisticated, it's clear that tools and tech stacks alone are not enough. From global enterprises to top universities, organizations must recognize that people—not just technology—are at the core of cyber defense. Our mission is to ensure SOC and incident response teams are always ready through immersive, real-world training programs that provide hands-on experience, build confidence, and help ensure resilience. Our presence at the summit underscores our commitment to advancing cyber defense capabilities across industries." Cloud Range's innovative approach has garnered significant recognition, including the 2025 SC Award for Best IT Security-Related Training Program and the 2025 Global InfoSec Award for Visionary Cybersecurity Training. These accolades and others reflect the company's dedication to providing cutting-edge solutions that address the evolving needs of cybersecurity professionals. Beyond enterprise solutions, Cloud Range is actively involved in shaping the future of cybersecurity education. Through collaborations with initiatives like IBM's Cyber Campus and partnerships with organizations such as Cyviz, Cloud Range is integrating its simulation technology into academic curricula, providing students with practical, real-world skills and experience to bridge the gap between theoretical knowledge and real-world application. It's a true redefinition of the student journey. For more information about Cloud Range's offerings or to schedule a demonstration at the Gartner Security & Risk Management Summit, visit: About Cloud Range Cloud Range is the first cyber Range-as-a-Service, delivering fully customizable cyberattack simulation training to prepare security teams for real-world threats. Trusted by enterprise SOCs, MSSPs, government agencies, higher education institutions, utilities, and critical infrastructure, Cloud Range helps organizations accelerate cyber defense skills and reduce risk. With Cloud Range's immersive, on-demand platform, customers can train teams, assess talent, onboard new hires, and upskill cybersecurity professionals—without needing costly physical labs or red teams. Recent recognition includes the 2025 SC Award for Best IT Security Training Program, the 2025 Global InfoSec Award for Visionary in Cybersecurity Training, the CISO Choice Award, and more. Stay ahead of threats with hands-on cyber readiness. Explore Cloud Range at View source version on Contacts Media Contact Leslie KesselringKesselring Communications for Cloud Rangeleslie@ 503-358-1012 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Skift
22 minutes ago
- Skift
New Report: How Travel Marketers Are Using AI
The travel business has unparalleled access to customer data, and AI offers ample avenues to apply it and improve the traveler experience. By creating insights and knowledge, including who to talk to, where to reach them, and what to say to them, AI offers travel marketers unique opportunities to help their brands make better decisions that can drive business growth at scale. This sponsored content was created in collaboration with a Skift partner. The travel industry stands apart in terms of the vast amounts of customer data it has at its fingertips. Travel's customer journey is uniquely personal, and the complexity of planning and booking yields rich customer profiles unparalleled in other industries and sectors. This outstanding opportunity comes with an equally daunting challenge. The amount of data available to travel marketers is much more than any person or team of people can make sense of on their own. Enter AI. Applications of AI technology give travel marketers the ability to create insights and knowledge, including who to talk to, where to reach them, and what to say to them. This offers opportunities to help their brands make better decisions that can drive business growth at scale. According to a 2024 Skift survey, nearly 90% of travel marketing leaders said that AI will be important in driving overall business value for their organization in the next three years. However, just 64% said they had already deployed AI solutions for marketing and advertising. This gap indicates that many in the industry willingly acknowledge the value of AI, but actual implementation often lags behind interest. What's holding them back? A new Epsilon Pulse research report analyzed motivations, investments, and barriers to AI across the retail, financial services, travel, restaurant, and consumer packaged goods (CPG) industries. Its insights help travel executives in all departments better understand how AI is revolutionizing the customer experience — and what they can do now to leverage its benefits to improve engagement and drive more revenue. AI Strategies for Travel Marketing: Key Trends and Highlights Travel Lags in Some Aspects of AI Strategy Like marketers in other industries, a vast majority of travel leaders are already invested in using AI for marketing. However, travel had the highest prevalence of non-users (11%), while all other sectors checked out between 4% and 6%. Furthermore, the travel industry was the least likely to find AI capabilities 'extremely valuable' for their business. Overall, 46% of marketers gave this response, compared to about 38% among travel leaders. Breaking the Cycle of Reactivity According to travel marketers, 'cost reduction' was the most common reason their organizations were motivated to adopt AI. By comparison, leaders in all other industries were most likely to say their organizations were primarily motivated by 'improving the customer experience' or 'increasing operational efficiency.' In addition, the travel industry's number one barrier to AI adoption was 'fear of change.' The landscape is changing around them, and if travel marketers aren't able to persuade organizational leaders how AI can benefit them through proactive customer engagement, they'll continue to lag behind. Top AI Applications for Travel Marketing Looking around at their counterparts, 33% of travel marketers believe that their colleagues and competitors in the industry are using AI effectively to offer personalized recommendations for customers, the most common response in the survey. When asked about specific marketing challenges that they believe AI can solve, 61% of travel marketers said that customer journey mapping was the most useful, followed distantly by predictive maintenance (39%). Additional Research and Data in This Report How marketers are using AI in travel and beyond AI's impact on market performance What's driving brands to invest in AI How much budget they're allocating to AI tools and technologies How to measure success Closing the Gap Between Theory and Practice This report explores the contrast between what travel marketers observe in their organizations — i.e., hesitancy to adopt due to cost and logistical concerns — and the potential value they see in improving the customer experience by moving forward with sophisticated AI strategies. The road to productive use of AI is a marathon, not a sprint, and there are widely varying degrees of usefulness and utility depending on the company and its goals. However, all travel marketers need to get off the starting blocks and benchmark against their competitors if they expect to stay in the race. This content was created collaboratively by Epsilon and Skift's branded content studio, SkiftX.
36 minutes ago
Getty Images and Stability AI face off in British copyright trial that will test AI industry
LONDON -- Getty Images is facing off against artificial intelligence company Stability AI in a London courtroom for the first major copyright trial of the generative AI industry. Opening arguments before a judge at the British High Court are scheduled for Monday. The trial could last for three weeks. Stability, based in London, owns a widely used AI image-making tool that sparked enthusiasm for the instant creation of AI artwork and photorealistic images upon its release in August 2022. OpenAI introduced its surprise hit chatbot ChatGPT three months later. Seattle-based Getty has argued that the development of the AI image maker, called Stable Diffusion, involved 'brazen infringement' of Getty's photography collection 'on a staggering scale." Tech companies have long argued that 'fair use' or 'fair dealing' legal doctrines in the United States and United Kingdom allow them to train their AI systems on large troves of writings or images. Getty was among the first to challenge those practices when it filed copyright infringement lawsuits in the United States and the United Kingdom in early 2023. 'What Stability did was inappropriate,' Getty CEO Craig Peters told The Associated Press in 2023. He said creators of intellectual property should be asked for permission before their works are fed into AI systems rather than having to participate in an 'opt-out regime." Stability has argued that the case doesn't belong in the United Kingdom because the training of the AI model technically happened elsewhere, on computers run by U.S. tech giant Amazon. Similar cases in the U.S. have not yet gone to trial. Stable Diffusion's roots trace to Germany, where computer scientists at Ludwig Maximilian University of Munich worked with the New York-based tech company Runway to develop the original algorithms. The university researchers credited Stability AI for providing the servers that trained the models, which require large amounts of computing power.
