An MIT study unveils the reasons the vast majority of companies investing in generative AI are failing to see measurable returns, despite tens of billions spent on the technology.
The State of AI in Business 2025 report by MIT researchers under Project NANDA conducted 52 structured interviews across enterprise stakeholders, systematically analyzed more than 300 public AI initiatives and announcements and surveyed 153 leaders.
Data shows that while AI adoption has exploded, only a handful of companies are realizing tangible financial impact.
“Despite $30–40 billion in enterprise investment into GenAI, this report uncovers a surprising result in that 95% of organizations are getting zero return… Just 5% of integrated AI pilots are extracting millions in value, while the vast majority remain stuck with no measurable P&L impact.”
Researchers say one reason enterprise adoption initiatives fail to generate returns is that companies use AI tools that are not suitable for their specific needs.
“Most GenAI systems do not retain feedback, adapt to context, or improve over time. A small group of vendors and buyers are achieving faster progress by addressing these limitations directly. Buyers who succeed demand process-specific customization and evaluate tools based on business outcomes rather than software benchmarks. They expect systems that integrate with existing processes and improve over time. Vendors meeting these expectations are securing multi-million-dollar deployments within months.”
A second failure lies in how companies deploy AI. The study notes that nearly two-thirds of projects never make it past the pilot phase. Researchers describe this as the “GenAI Divide,” where a few firms operationalize AI across workflows while others get trapped in endless testing and proof-of-concept loops.
“Sixty percent of organizations evaluated such tools, but only 20 percent reached the pilot stage, and just 5 percent reached production.”
Another key insight from the report is that companies are often deploying AI in the wrong places. Nearly half of all generative AI budgets are flowing into sales and marketing, where results are easier to measure but not necessarily more valuable.
“Investment allocation reveals the GenAI Divide in action, 50% of GenAI budgets go to sales and marketing, but back-office automation often yields better ROI. This bias reflects easier metric attribution, not actual value, and keeps organizations focused on the wrong priorities.”
MIT says companies can get the most out of their AI investments by partnering with firms that offer custom systems and focusing on workflow integration over flashy demos.
You can read the full report here.
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