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Report finds that one-third of businesses will abandon gen AI projects before 2026

The generative AI bubble has been a hot topic in the tech world, with many businesses investing heavily in AI projects in hopes of reaping significant returns. However, a recent Gartner report suggests that the bubble may be over-inflated, with around 30% of generative AI projects expected to be abandoned by the end of 2025 due to various challenges.

One of the main reasons cited for the potential failure of these projects is poor data quality, suboptimal risk controls, and a lack of clear business value. According to Gartner, deploying generative AI organization-wide can cost businesses millions of dollars, with custom models and API integrations adding to the already high costs. This has led to a disconnect between the investment made in AI tools and the actual financial gains businesses are seeing.

Despite these challenges, some businesses have reported improvements in revenue, cost savings, and productivity from their generative AI projects. However, the focus on enhancing productivity can make it difficult to directly translate these benefits into financial gains. AI benchmarking, which often focuses on minute performance metrics, may not accurately reflect the true value of AI tools to businesses and their clients.

To address these issues, AI companies are working on developing new benchmarks and measurement tools to better assess the capabilities of AI models. Marketers, in particular, are starting to see the value of AI tools, especially in terms of creative capabilities. AI-powered search engines, chatbots, video translations, and ad targeting tools are just some of the latest innovations in the AI space.

In addition to advancements in AI technology, there have been notable partnerships and acquisitions in the ad tech industry. Companies like Connatix, JW Player, iSpot, and Outbrain are joining forces to create more comprehensive advertising platforms that cater to the evolving needs of advertisers and publishers. These collaborations aim to provide better audience targeting, measurement, and monetization opportunities for businesses.

Looking ahead, the 2024 Paris Olympics are expected to generate record ad revenue, with new sponsors contributing over $500 million. Media buyers and planners attribute this success to factors such as the time zone difference, the availability of fresh content across multiple screens, and the accessibility of streaming-only packages. Advertisers are also focusing on athlete-centered ads and leveraging social media platforms to engage with younger audiences.

Overall, the generative AI bubble may not be bursting, but it is certainly facing challenges that businesses need to address. By focusing on clear business value, improving data quality, and developing better measurement tools, businesses can maximize the potential of their AI projects and ensure long-term success in the evolving tech landscape.

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