Particle.news

Download on the App Store

AI Boom Faces a Reality Check After MIT Says 95% of Pilots Stall

Analysts urge investors to favor cash‑rich cloud titans over hype‑driven names.

Overview

  • MIT’s NANDA initiative reports that about 95% of enterprise AI pilots fail to progress, pointing to adoption hurdles and resource misallocation rather than model quality.
  • AI‑linked tech stocks in the U.S. shed roughly $1 trillion over four days following the study, intensifying bubble comparisons.
  • Funding has concentrated in AI this year, with CB Insights estimating about half of H1 2025 venture dollars went to AI and enterprises spending an estimated $30–$40 billion on generative AI.
  • Investor nerves have been frayed by high‑profile stumbles such as OpenAI’s GPT‑5 rollout and by Sam Altman’s warning that investors are over‑excited about AI.
  • Fresh guidance highlights sticking with cash‑generating cloud and infrastructure leaders and warns that richly valued, profit‑light names are most vulnerable if sentiment turns.