#358 Why 95% of AI Projects Fail and How to Succeed

**Michael Chavira** (0:00)
I'm realizing there's a lot of interesting topics here. It was like, when I first started the research, I was thinking, oh, this would be great. I'll figure this out. I can give a solution, write a book about it, and people can cookie cutter it.
But the more I talk to different organizations, I'm realizing it's a very custom solution for every organization.

**Dr. Darren Pulsipher** (0:22)
Welcome to Embracing Digital Transformation, where we explore how people process policy and technology drive effective change. This is Dr. Darren, Chief Enterprise Architect, Educator, Author, and most importantly, your host. On this episode, why 95 percent of AI projects fail, and how to succeed, with Michael Chavira, the co-founder and managing partner of Axiologic Solutions.
Mike, welcome to the show.

**Michael Chavira** (0:56)
Thank you, Darren, thanks for having me.

**Dr. Darren Pulsipher** (0:58)
Hey, I'm really interested about today because I have been quoting this stat, 95 percent of AI projects fail, and we're going to find out why, and we're going to solve all of those problems today on this episode.

**Michael Chavira** (1:11)
It's very ambitious.

**Dr. Darren Pulsipher** (1:13)
Very ambitious. Well, I'm an ambitious guy, right? Yeah. I know you've got all the answers. Michael, see how it goes. But before we get started, everyone that listens to my show knows that I only have superheroes on the show.
And every superhero has a secret identity and a background story. We won't reveal your secret identity, but we want to know your origin story. We want to know your background.

**Michael Chavira** (1:41)
Okay, great. Great. So yeah, I'm Mike Chavira. I grew up in a small town in Wyoming, Palo Wyoming, 5,000 people. Ended up going to the University of Wyoming. And from there, I went into the military. I went into OCS, went to the naval background that way. And through the military, it brought me out to DC. I was an Intel officer for a while. And then when I got out, I was working at Booz Allen, at Hamilton for a while as a defense contractor.
Like doing that, I learned the market really well. And I thought that me and a friend of mine, Michael Stauber, decided as like, hey, I think we can go off on our own. And that was 17 years ago, actually. It was just our anniversary, 17 years, just a few days ago. And so, yeah, we've been in business ever since then. And I met Tom at UVA. We both got our system engineering degrees.
And yeah, we've been doing system engineering for the government, the military and intelligence community ever since. And our service offerings have definitely morphed over time. But yeah, I've been living in the DC area now for the last almost two decades, just doing this type of work.

**Dr. Darren Pulsipher** (2:53)
Well, first off, Mike, thanks for your service. I appreciate it more than you know.
And defending our country and doing great intelligence work for our country. I appreciate that. And then also, wow, what a great story, right? Going out on your own. That's got to be a little bit scary.

**Michael Chavira** (3:13)
It is. I mean, it was, looking back, it was not only scary, it was very naive how we did it. I'm not sure I would do it the same way again. I mean, we left our jobs, and we started working immediately. And Tom, to his credit, a week before had twins.
So he was able to convince his wife to let him do this. And so she's a big part of the story too. I mean, I thank her a lot for supporting us throughout this whole process. And now his kids, I always know how old they are because they're the same age as the company.

**Dr. Darren Pulsipher** (3:49)
That's right. So you always know that's awesome.

**Michael Chavira** (3:52)
Yeah.

**Dr. Darren Pulsipher** (3:53)
So Mike, let's dive into, you've been in the industry, especially around defense and government. You've seen major shifts in government. Yes. Frankly, just over the last two years, there's been major shifts in government.
Big shift to AI. Why do you think we're having such a hard time tackling or getting the ROI out of AI that we were all promised?

**Michael Chavira** (4:22)
So I said before, Darren, before we got started, I've been having this conversation a lot recently.
And it started about a year and a half ago for me.
I'm getting my doctorate right now. It's something that's been a lifelong goal of mine to get a doctorate degree. And when I was trying to think about where I should get my concentration in, I started talking to some of the professors and now my chair, Dr. Rajiv Nag, him and I started talking about it and I had helped one of his other students with her dissertation. And he's like, hey, you have a great systems background. Like, have you thought about looking at this from a systems perspective? And the more I dug into it, the more I thought that this was really interesting. And I looked at it from different angles, from a systems perspective. And then that MIT article came out sometime last year. Actually, I think it was around this time last year it came out, where it said like 95 percent of AI pilots are failing. And I read that article and I'm like, oh, well, here's the answer is like, you know, that changes my dissertation topic altogether. But the more I read it, the more I realized, hey, that's not necessarily the case.