Decline in AI Project Deployment

Investing.com — Barclays (LON:BARC) reported that there is a decline in AI project deployments and those showing "meaningful" ROI, with both metrics hovering around 45-50% according to the latest AI survey.

Key Findings

• Decreased Deployment: The percentage of AI projects being deployed is falling, and fewer deployed projects are yielding meaningful ROI.
• Cautious Investment: Large enterprises show limited urgency in expanding AI deployments due to high costs and early-stage ROI challenges.
• Generative AI Costs: Average preparation costs for generative AI, including data cleanup and training, are estimated at $75 million.
• Vendor Preferences: Many organizations are waiting for the emergence of "best-of-breed" AI vendors before making substantial investments.
• Adoption Challenges: Issues like data security, managing structured and unstructured data, and limited experience with large language models (LLMs) slow down adoption.
• Budget Trends: AI budgets are increasingly being separated from general IT budgets; 46% of respondents plan budget increases, and 15% will reallocate funds from software budgets.
• Growth Projections: Barclays anticipates a 1-10% growth in generative AI investments over 2-5 years.
• Increased Awareness: AI awareness and usage continue to grow, especially among small and mid-sized companies, with customer service and productivity enhancements as top priorities.
• Data Challenges: Bottlenecks in sourcing and cleaning data have increased by 10 percentage points year-over-year to 48%, posing significant hurdles.

Conclusion

Barclays' findings reflect cautious optimism for AI adoption, which is dependent on overcoming cost and deployment challenges.