At the Gartner IT Symposium in Orlando, analysts highlighted the ongoing challenges CIOs face with generative AI, noting many are struggling to achieve expected returns on investment. According to Gartner’s research, nearly half of CIOs report that AI has not met ROI expectations, and organizations may miscalculate AI costs by up to 1,000% as they scale their plans. In 2023, businesses deploying AI spent between $300,000 to $2.9 million just in the proof of concept phase. Gartner’s research indicates that cost is a significant risk, with experts warning that it’s easy to overspend on generative AI initiatives. Gartner places generative AI just past the peak of inflated expectations in its hype cycle, indicating a shift toward a more realistic assessment of the technology’s capabilities.
At the North America Forum 2024, market analyst Jay Canalys boldly predicted that Intel may cease to exist in its current form, potentially due to the spin-off of its foundry business or an acquisition post-U.S. presidential election. Chief Analyst Jay McBain emphasized that changes in technology, including developments at ARM and a shift towards GPU-led AI, will significantly alter Intel’s landscape. Canalys also predicted that IT spending across software, hardware, and services will grow to $6.3 trillion by 2027, driven primarily by AI. Furthermore, it’s expected that by 2027, over 95% of distributors will face challenges securing funding to adapt to the AI era, leading to further consolidation. Additionally, Canalys forecasts that half of all global edge services revenue will be AI-augmented by 2027, reflecting a significant shift in how businesses operate and leverage technology.
Why do we care?
The common theme here is that while AI’s potential to transform industries is very real, many organizations are struggling to capitalize on it due to cost miscalculations, skill gaps, and unrealistic expectations. For IT leaders, the message is clear: grounded, realistic assessments of AI’s capabilities and costs are essential to avoid financial and operational setbacks.
I will make a comment here – I wholeheartedly agree with Jay’s prediction, and I will challenge some of the coverage I’ve seen of it as bold. It’s not – Intel, as an organization, isn’t delivering results. So of course it’s current form won’t exist because that’s failing. Call a spade a spade.