After thousands of AI proof-of-concept projects have died on the vine, many organizations are scaling back internal efforts in favor of adopting commercial, off-the-shelf AI tools. About half of companies surveyed by Gartner in late 2023 were developing their own AI tools, but the number fell to about 20% at the end of 2024, says John-David Lovelock, a vice president and analyst at Gartner. Many organizations are still running a few POCs, but cooling hype surrounding generative AI has many CIOs turning to vendors, whether they be large language model (LLM) providers or traditional software sellers with AI built into their products, Lovelock says. Many ambitious AI projects started in 2024 or earlier now face internal scrutiny because of the high POC failure rates, Lovelock adds. Recent research by IDC found that 88% of POCs didn’t make it into widescale deployment, while CIOs struggle to define POC success. “Last year, when CIOs were doing proof of concept work and getting lots of help from service providers and internal resources, there was a fairly high failure rate among companies that already had a good pedigree in artificial intelligence,” Lovelock says. “But for companies that didn’t have that same pedigree, their failure rates were over 50% higher.”

Full report : High failure rates and low returns of homegrown AI pilots are accelerating a shift to commercial, off-the-shelf solutions as software vendors roll more AI functionality into their products.