AI Boom… Bust: Wasted Money – Are Tech Companies Taking a U-Turn?
Hey friends, these days, everyone’s talking about AI (Artificial Intelligence) like it’s going to change the world and make billions, right? But now, it seems like the hype is fizzling out a bit. A study by MIT, a big university, dropped a bombshell: 95% of generative AI projects are failing! On top of that, Meta (you know, the Facebook folks) is making massive changes to its AI division, and there’s even talk of layoffs. All this is raising fears that the AI boom might turn into a tech bubble burst. Let’s break it down in a simple way.
MIT Study: Why Are AI Projects Failing?
The Massachusetts Institute of Technology (MIT) released a report called The GenAI Divide: State of AI in Business 2025. It says that companies are pouring billions into AI projects, but 95% of them are flopping. Only 5% are actually succeeding. The reason? AI tools are great for personal use, but they’re not fitting into companies’ day-to-day workflows.
For example, companies are trying to build their own AI models, but it’s super expensive and often doesn’t work out. Instead, using third-party tools seems to give better results. This study was based on interviews with 150 business leaders, surveys of 350 employees, and analysis of 300 AI projects. It’s signaling that the AI boom might be a bubble, as the huge investments aren’t bringing in returns.
Meta’s U-Turn: Big Changes in the AI Division
Now, here’s another sign that the AI hype might be cooling off—Meta. Mark Zuckerberg, Meta’s CEO, is shaking things up in their Super Intelligence Lab. They recently spent millions hiring AI engineers, but now they’ve frozen hiring and split the division into four groups. There’s even talk of layoffs.
Meta’s Chief AI Officer, Alexander Wang (who came from Scale AI), wrote in a memo that to compete in super intelligence, they need to focus on research, product, and infrastructure. They’ve canceled their Artificial General Intelligence Foundations group. Big media outlets like Bloomberg and The New York Times reported on this. Meta is also starting to use third-party AI models instead of relying only on its own tech.
Plus, the VP of Meta’s generative AI group, Loredana Crisan, is leaving for a job at Figma. Some other executives are also resigning. All this is creating uncertainty among employees. What was once seen as Meta’s big growth engine—its Super Intelligence Lab—now looks like it’s taking a U-turn.
What’s All This Signaling?
Investments in AI could cross $200 billion this year, according to estimates. But if the results don’t come, this could turn into a bubble that bursts. As the MIT study suggests, companies need to focus on specific problems and use external tools. When big players like Meta take a U-turn, it makes you wonder if other tech companies will follow.
Here’s an interesting tidbit: the study found that in over 90% of companies, employees are secretly using chatbots for daily tasks without IT approval—called “Shadow AI.” These tools are often giving better returns than official AI projects! So, AI isn’t a complete waste, but it needs the right approach.
