Agentic AI Faces a Reckoning as Enterprises Demand Real Business Value

Dewain Robinson (0:01)

Welcome to the Cloud Wars AI Minute. I'm your host, Dwayne Robinson, and we're going to go over the things that your boss expects you to know about what's happening in the world of AI.

And the one I want to talk about today is that we're starting to see some interesting analysis coming out of organizations like Gartner. So Gartner is saying that 40% of agentic AI projects die by 2027 Now, while that sounds pretty daunting, it's not that they're actually saying that we're going to see a reduction in AI. It's just that there are a lot of projects that are going on within organizations that don't actually have good business value or good return on investment. And we're starting to see organizations be able to determine what are good value AI projects versus poor projects. And we already started to see a lot of pilots that were just failing over and over and over because people were trying to implement technology just for technology's sake. So I think we're going to definitely see an improvement across the organization around the world and just being able to get better at determining whether or not there is a value return on these different AI projects that people are doing across the board. And what you're also seeing is that right now we've got about 130 or so is going to see Gartner Counts as legitimate real organizations doing AI things. And so what we want to see is that a separation between organizations that are just basically doing what we refer to as agent washing, which is just taking and putting in an agent, whether that agent is actually doing anything of value or not within their organization or as a product, they're just following that trend, where what we really want to see is agents or AI technology that's coming in to actually solve new problems, not just put a fancy UI on top of an existing API.

So those type of things, we should continue to see organizations getting better at this, but it will mean we will see a reduction in the number of players in this space over time. Matter of fact, what we're expecting is that if we really look at this and we follow what Gartner is saying, they believe that we're going to see about a 33% reduction in the number of companies that are actually playing in the AI space or enterprise software companies that are claiming to be AI type of companies. And a lot of it has to do with just not being able to justify the value behind what they're doing and doing this agent washing type of capabilities. So make sure you're paying attention to anything that you're looking to purchase as you go into this whole AI space and ask yourself, is this organization truly an AI organization? And are we thinking that they're going to be around long term because they may be doing stuff that may look like AI, but they're simply just washing over an API with an AI implementation that really doesn't add a ton of new value. So keep a look on this and we'll keep monitoring it as we go.