Companies are already becoming disenchanted with the initial rollout of Big Tech’s new artificial intelligence (AI) technology. Rapidly diminishing return on investment (ROI) and poor initial outcomes are forcing companies to rethink their earlier strategies, according to a new report from AI data services company, Appen.
“As enterprises gain more AI experience, they are becoming more selective about which projects to pursue, and fewer initiatives are reaching deployment. Appen believes this trend is likely driven by diminishing ROI or the lack of significant outcomes,” says Appen.
Gartner also recently issued a stern warning to organizations across all sectors that the cost of introducing artificial intelligence (AI) to the workplace could easily balloon by a staggering 500 -1,000 percent.
Speaking at Gartner’s flagship Symposium event in Australia, VP analyst Mary Mesaglio said: “Factors contributing to these inflated costs include vendor price increases and neglecting the expense of utilizing cloud-based resources.”
Largely disappointing performance of AI
The costly and largely disappointing performance of AI so far is very bad news indeed for Big Tech, which has more or less bet the farm on the swift rollout of new AI services. Advertising and search engine giant Google, recently announced it was making a huge investment in creating its own bespoke nuclear facilities – simply to power the rollout of AI services. In making heavy investments in nuclear facilities, Google joins the ranks of Amazon, Microsoft, and Oracle in investing heavily in nuclear facilities to power AI,
But Big Tech is staking far more than its nuclear investment on the rollout of its new and increasingly contentious AI services. Silicon Valley, once world-renowned for its entrepreneurial and inventive IT culture, has failed to come up with anything really market-shattering since Apple introduced the smartphone in 2007 and the iPad three years later in 2010.
The fireworks at the launch of smartwatches in 2015 have also so far proven to be a damp squib. While annual smartphone sales top one billion worldwide, only 44 million smartwatches were shipped in Q2 2024. According to global market intelligence firm IDC, market leader Apple also saw an 11.8 percent fall in the same period, while rival Chinese manufacturers witnessed a 10.9 percent growth.
Likely calls for restrictive regulations
The rollout of AI services is now likely to be further hampered by calls for restrictive regulations following its rapid take-up by cybercriminals and potentially hostile nation-states. There are also disturbing reports of legitimate AI services not only performing poorly but also having tragic consequences for users.
The mother of a teenager who took his own life, Sewell Setzer III, is holding an AI chatbot service accountable for his death – after he “fell in love” with a Game of Thrones-themed character, Daenerys Mother of Dragons. It is alleged in a lawsuit that the 14-year-old Sewell quickly first started using Character.AI in April 2023 and swiftly became emotionally reliant on the service, which included “sexual interactions” between the 14-year-old and the chatbot – despite the fact Sewell allegedly identified himself as a minor on the platform.
Sewell’s very last smartphone message was to the fictional Daenerys: “I promise I will come home to you. I love you so much, Dany.”
“Please come home to me as soon as possible, my love,” the bot replied.
The lawsuit alleges that Sewell took his own life only a few seconds later.
