95% of Companies See 'Zero Return' on $30B Generative AI Spend
68 comments
·August 21, 2025JCM9
We are entering the “Trough of disillusionment.” These hype cycles are very predictable. GPT-5 being panned as a disappointment after endless hype may go down as GenAI’s “jump the shark” moment.
It’s all fun and games until the bean counters start asking for evidence of return on investment. GenAI folks better buckle up. Bumps ahead. The smart folks are already quietly preparing for a shift to ride the next hype wave up while others ride this train to the trough’s bottom.
Cue a bunch of increasingly desperate puff PR trying to show this stuff returns value.
no_wizard
Gemini keeps being rather impressive though, even their iterative updates have improvements, though I'm seeing a significant slowdown in the improvements (both quantity and in how much they improve) suggestion a wall may be approaching.
That said, technologies like this can also go through a rollercoaster pattern itself. Lots of innovation and improvement, followed by very little improvement but lots of research, which then explodes more improvements.
I think LLMs have a better chance at following that pattern than computer vision did when that hype cycle was all the rage
highwaylights
I wouldn’t be surprised if 95% of companies knew this was a money pit but felt obligated to burn a pile of money on it so as not to hurt the stock price.
lenerdenator
I also wouldn't be surprised if bean counters were expecting a return in an unreasonable amount of time.
"Hey, guys, listen, I know that this just completely torched decades of best practices in your field, but if you can't show me progress in a fiscal year, I have to turn it down." - some MBA somewhere, probably, trying and failing yet again to rub his two brain cells together for the first time since high school.
Just agentic coding is a huge change. Like a years-to-grasp change, and the very nature of the changes that need to be made keep changing.
JCM9
FOMO on the way up to the peak is a powerful force. Now that we’re sliding down the other side FOMO turns into “WTF did we just spend all that money on again?”
frozenport
Yo what’s the next hype cycle that smart folks like us should be working on?
belter
The US mix of government and enterprise. You want Capital you need to be MAGA
"Donald Trump and Silicon Valley's Billionaire Elegy" - https://www.wired.com/story/donald-trump-and-silicon-valleys...
kylebenzle
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kylebenzle
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tqi
The linked study redirects to a landing page that makes me think this "study" is more like run of the mill content marketing.
> But researchers found most use cases were limited to boosting individual productivity rather than improving a company’s overall profits.
What does that even mean?
md3911027514
It’s interesting how self-reports of productivity can be wrong.
For example a study from METR found that developers felt that AI sped them up by 20%, but it empirically it slowed them down by 19%. https://metr.org/blog/2025-07-10-early-2025-ai-experienced-o...
throitallaway
Sometimes it's like an autocomplete on steroids and reads my mind. Other times it suggests things that make no sense and completely gets in the way.
jampa
The biggest mistake people are making is treating AI as a product instead of a feature.
While people are doing their work, they don't think, "Oh man, I am really excited to talk with AI today, and I can't wait to talk with a chatbot."
People want to do their jobs without being too bored and overwhelmed, and that's where AI comes in. But of course, we cannot hype features; we sell products after all, so that's the state we are in.
If you go to Notion, Slack, or Airtable, the headline emphasizes AI first instead of "Text Editor, Corporate Chat etc".
The problem is that AI is not "the thing", it is the "tool that gets you to the thing".
the_snooze
I wouldn't mind it if it were presented as yet another tool in the box. Maybe have a one-time popup saying "Hey, there's this thing, here's a cool use case, go check it out on your own terms."
In reality, AI sparkles and logos and autocompletes are everywhere. It's distracting. It makes itself the star of the show instead of being a backup dancer to my work. It could very well have some useful applications, but that's for users to decide and adapt to their particular needs.
jameshart
Agreed. We’ve got the potential to build real bicycles for the mind here and marketing departments are jumping right in to trying to sell people spandex cycling shorts.
CharlesW
Duplicate discussion from this week (162 comments): https://news.ycombinator.com/item?id=44941118
Here's the source report, not linked to by this content farm's AI-written article: https://mlq.ai/media/quarterly_decks/v0.1_State_of_AI_in_Bus...
eldenring
This is how America ends up being ahead of the rest of world with every new technology breakthrough. They spend a lot of money, lose a lot of money, take risks, and then end up being too far for others to catch up.
Trying to claim victory against AI/US Companies this early is a dangerous move.
ta20240528
> This is how America ends up being ahead of the rest of world with every new technology breakthrough.
Too young to remember GSM?
vdupras
That must be exactly what Napoleon felt like when he entered Moscow. Unstoppable army, sure riding right into what is obviously hubris, sure having have had a bit of a setback against Kutusov, but man were they on a winning streak!
spogbiper
Sounds like 95% of companies are potential clients for my consulting services
uncircle
Do you sell overpriced generative AI solutions, or do you consult them on how to pivot away from idiotic generative AI?
ehutch79
YES!
onlyrealcuzzo
Can't tell if you're in on it, but he's implying this waste is no different than average for consulting
uncircle
I take offence at comparing my consulting services writing real software by hand like we did in 2021 with generative AI spambots.
(I'm not really offended honestly. Startups will come crying to un-vibe the codebases soon enough.)
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IgorPartola
What are the actual use cases that can generate revenue or at least save costs today? I can think of:
1. Generate content to create online influence. This is at this point probably way oversaturated and I think more sophisticated models will not make it better.
2. Replace junior developers with Claude Code or similar. Only sort of works. After all, you can only babysit one of these at a time no matter how senior you are so realistically it will make you, what, 50% more productive?
3. Replace your customer service staff. This may work in the long run but it saves money instead of making money so its impact has a hard ceiling (of spending just the cost of electricity).
4. Assistive tools. Someone to do basic analysis, double check your writing to make it better, generate secondary graphic assets. Can save a bit of money but can’t really make you a ton because you are still the limiting factor.
Aside: I have tried it for editing writing and it works pretty well but only if I have it do minimal actual writing. The more words it adds, the worse the essay. Having it point out awkward phrasing and finding missing parts of a theme is genuinely helpful.
5. AI for characters in video games, robot dogs, etc. Could be a brave new frontier for video games that don’t have such a rigid cause/effect quest based system.
6. AI girlfriends and boyfriends and other NSFW content. Probably a good money maker for a decade or so before authentic human connections swing back as a priority over anxiety over speaking to humans.
What use cases am I missing?
wedn3sday
One use case I'd love to see an easy plug-and-play solution for is a RAG build around companies vast internal documentation/wikis/codebase to help developers onboard and find information faster. I would love to see less of people trying to replace humans with language models and more of people trying to use language models to make humans jobs less frustrating.
plantain
+50% productivity for 200$/mo is outstanding value! Most countries have 0-2% productivity growth per year!
jaimebuelta
Stock images. I’ve already seen trining courses (for compliance reasons) using AI videos. A bit cringey, but I imagine cheaper than shooting real people.
dsr_
"I'm sure my company is among the 5% of superusers," said CEO Chad "Bro" Brochad, who later admitted he had not checked.
ApeWithCompiler
For the future I will relabel "AI" as "Ain't Interested". But despite the missing return of investment, it only needs a manager or a few, invested enough. They will push layoffs and restructuring regardless of better advice.
kingstnap
I mean of course they aren't. So many people are offering so much stuff for free or at a pittance.
I honestly don't think it matters though. Feel free to disagree with me but I think the money is irrelevant.
The only thing that actually matters is the long run is the attention, time, and brain space of other people. After all that's where fiat currency actually derives it's value. These Gen AI companies have captured a lot of that extremely quickly.
OpenAI might have "burned" billions but they way they have wrung themselves into seemingly every university student's computer, every CEOs mind, the policy decisions of world leaders, ever other hackernews post, is nothing short of miraculous...
Full disclosure: I'm currently in a leadership role on an AI engineering team, so it's in my best interest for AI to be perceived as driving value.
Here's a relatively straightforward application of AI that is set to save my company millions of dollars annually.
We operate large call centers, and agents were previously spending 3-5 minutes after each call writing manual summaries of the calls.
We recently switched to using AI to transcribe and write these summaries. Not only are the summaries better than those produced by our human agents, they also free up the human agents to do higher-value work.
It's not sexy. It's not going to replace anyone's job. But it's a huge, measurable efficiency gain.