MIT report: 95% of generative AI pilots at companies are failing

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Companies are betting on AI—yet nearly all enterprise pilots are stuck at the starting line

The re—based on 150 interviews with leaders, a survey of 350 employees, and an analysis of 300 public AI deployments—paints a divide between success stories and stalled jects.To unpack these findings, I spoke with Aditya Challapally, the lead author of the report, who heads the Connected AI group at the MIT Media Lab. “Some large companies’ pilots and younger startups are really excelling with generative AI,” Challapally said

The core issue? Not the quality of the AI models, but the “learning gap” for both tools and organizations

While executives often blame regulation or model performance, MIT’s re points to flawed enterprise integration

Generic tools ChatGPT excel for individuals because of their flexibility, but they stall in enterprise use since they don’t learn from or adapt to workflows, Challapally explained.The data also reveals a misalignment in resource allocation

More than half of generative AI budgets are devoted to sales and marketing tools, yet MIT found the biggest ROI in back-office automation—eliminating cess outsourcing, cutting external agency costs, and lining operations

What’s behind successful AI deployments? How companies adopt AI is crucial

Yet, MIT’s re suggests companies see far more failures when going solo.Companies surveyed were often hesitant to failure rates, Challapally noted. “Almost everywhere we went, enterprises were trying to build their own tool,” he said, but the data showed purchased solutions dered more reliable results.Other key factors for success include empowering line managers—not just central AI labs—to drive adoption, and selecting tools that can integrate deeply and adapt over time.Workforce disruption is already underway, especially in customer support and administrative roles

Rather than mass layoffs, companies are increasingly not backfilling positions as they become vacant

Most changes are concentrated in jobs previously outsourced due to their perceived low value.The report also highlights the widespread use of “shadow AI”—unsanctioned tools ChatGPT—and the challenge of measuring AI’s impact on ductivity and fit.Looking ahead, the most advanced organizations are already experimenting with agentic AI systems that can learn, remember, and act independently within set boundaries—offering a glimpse at how the next phase of enterprise AI might unfold

Sheryl Estradasheryl.estrada@fortune.comLeaderboardMichael A

Discenza was appointed VP and CFO of The Timken Company (NYSE: TKR), effective immediately

Discenza has 25 years of experience at Timken in roles of increasing responsibility, including the last 10 as VP of finance, and group controller.John Cole was appointed CFO of ELB Learning, a vider of immersive learning solutions

He brings more than 25 years of experience leading finance and operations for Fortune 100 and 500 companies, according to ELB

Cole aims to strengthen the financial infrastructure to support the company’s next phase of growth.Big DealModern manufacturing relies heavily on connected devices and industrial control systems, which are prime targets for cyberattacks

For tection, manufacturers are increasingly turning to AI to help manage these risks, according to the State of Smart Manufacturing Report by Rockwell Automation, Inc

Cybersecurity now ranks among the top external risks, second only to inflation and economic growth

One-third of respondents hold responsibilities spanning both information nology (IT) and operational nology (OT) cybersecurity

However, a shortage of skilled talent, training challenges, and rising labor costs remain major hurdles

As manufacturers recruit the next generation, cybersecurity and analytical skills are becoming hiring priorities—reinforcing the need to align nical innovation with human development, according to the report

Going deeperIn a new Fortune opinion piece, "Future CEOs, erased: the economic cost of losing Black women in the workforce," Katica Roy, the CEO and founder of the Denver-based Pipeline, a SaaS company, explains the implications of almost 300,000 Black women exited the labor force so far this year—thinning a pipeline that was already too narrow. "This isn’t a seasonal fluctuation or statistical footnote

It’s a strategic failure with long-term consequences," Roy writes. "Black women have long been a cornerstone of America’s economic engine—driving participation, powering key industries, and anchoring family incomes

Now, that foundation is fracturing

And the fallout is more than short-term—it’s a direct threat to corporate succession planning, innovation, and growth

The U.S. economy has always dep on Black women’s labor

In fact, no group of women in America has historically had higher labor force participation than Black women." Overheard“Every single Monday was called 'AI Monday.' You couldn’t have customer calls, you couldn’t work on budgets, you had to only work on AI jects.”—Eric Vaughan, CEO of enterprise software company Ignite, told Fortune in an interview that he established a mandate: on Mondays, staff could only work on AI

His ultimate response? He replaced nearly 80% of the staff within a year, according to headcount figures reviewed by Fortune

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