42% of firms scrapped the majority of their AI projects in 2025,
S&P Global Market Intelligence (Mar 2025)
up from only 17% in 2024.
On average, 46% of PoC’s are dropped before reaching production
An AI correction is well underway. The hype pendulum has swung from uncritical enthusiasm to defensive hesitation.
Boards now ask tougher questions. CFOs delay funding. PoCs stall under scrutiny, and risk teams apply a heavier hand. The shift isn’t just economic — it’s emotional. AI is no longer a badge of innovation, but a source of accountability.
While many vendors keep pitching plug-and-play magic, firms are realising that lasting AI value depends on transformation foundations they haven’t yet built.
This post-hype phase is not a failure, but an adaptation — and it may be the best thing to happen to AI strategy.
The AI hype didn’t oversell potential — but it obscured responsibility.
Many firms were sold solutions without being made aware of their role in making them work. Strategy was outsourced to tech vendors, and readiness was assumed, ownership blurred. Foundational transformation was sidelined in the rush to “get something live.”
As PoCs moved forward, underlying risks surfaced: hallucinations, bias, drift, and brittleness in real-world conditions. But another deep failure was organisational — AI was implemented without aligning people, process, or governance for success. That’s not an AI problem, it’s a transformation one.
These failures have left behind internal reputational scars. Now, teams are gun-shy, appetite is cautious, and expectations have shifted from “first to scale” to “first to prove.”
The market hasn’t lost interest in AI. But the bar is now higher — and clearer. Stakeholders want confidence and line of sight to value, and strategic pathways that are built on fit-for-purpose foundations – not Powerpoint promises.
The illusion that AI could be adopted without structural change is collapsing.
This shift from hype to hesitation isn’t a failure, it’s a correction, and strategy must follow suit.
The post-hype AI leader isn’t the loudest — it’s the most prepared. That means shifting focus from surface experimentation to structural enablement. The priority isn’t just what to build, but how to build the capability to build — reliably, repeatedly, responsibly.
Organisations must internalise the truth: AI is not plug-and-play, it’s embedded. Success depends on transforming systems, not just deploying tools. A full-stack transformation system is required — across people, process, data, and governance — designed to make AI operationally viable.
AI strategy needs a new center of gravity, and the goal isn’t just PoC volume, but production-grade confidence. That means rethinking how initiatives are selected, how value is measured, and how risk is governed — before the first model goes live.
A new kind of accountability must emerge, where business functions co-own AI outcomes, and technology teams enable the path to operational scale.
AI hype still roars. But the smart money’s on grounded, unglamorous strategy
The hype was never the problem — but mistaking it for strategy was.
