The role of artificial intelligence (AI) in large corporations is under intense scrutiny, with a recent analysis from the Financial Times revealing that many companies struggle to articulate the benefits of AI adoption. Despite significant investments, a majority of businesses cannot provide tangible evidence of how AI is enhancing their operations. This uncertainty casts doubt on whether AI will truly be the transformative force some leaders have claimed it to be.
The Financial Times examined hundreds of corporate filings and earnings call transcripts from the largest firms listed on the S&P 500. The findings indicated that many organizations are motivated more by a sense of urgency to keep pace with rivals rather than a clear strategic vision for AI implementation. According to Haritha Khandabattu, a senior director analyst at Gartner, the prevailing sentiment is driven by “FOMO,” or “Fear of missing out.” Khandabattu noted that leaders often focus on competitors’ potential advancements rather than identifying specific problems AI could solve.
This trend highlights the pitfalls associated with rapid AI adoption, where hype can overshadow critical assessments of the technology’s effectiveness. A study from the Massachusetts Institute of Technology revealed that a staggering 95 percent of companies that incorporated AI reported no meaningful growth in revenue. As firms continue to invest heavily in AI, its actual usefulness remains elusive.
Despite this lack of clarity, the Financial Times found that 374 of the S&P 500 companies mentioned AI in their earnings calls over the past year. Around 87 percent of these discussions presented AI in overwhelmingly positive terms. Companies frequently promised that AI would enhance productivity and streamline workflows, yet many failed to specify how these improvements would materialize.
Interestingly, some firms expressed enthusiasm for AI applications that did not directly relate to their core business activities. For example, executives at Coca-Cola highlighted the use of AI in creating a television commercial, leaving observers to question its relevance to beverage production.
Meanwhile, companies that report clear benefits from AI often seem to profit primarily from the surrounding hype rather than the technology itself. For instance, energy companies supplying power to AI data centers and mining firms benefiting from increased metal prices due to data center construction have capitalized on this AI boom.
Despite the excitement, concerns about AI’s potential risks are rising. More than half of the S&P 500 companies cited cybersecurity as a significant worry for 2024. The dating app Match Group specifically warned that AI could lead to “cybersecurity incidents that implicate the personal data of end users of AI-enhanced services.”
Legal liabilities also present a major concern. Companies like Anthropic face substantial lawsuits for alleged copyright infringements related to their AI training data. The company is currently liable for $1.5 billion to authors whose work was reportedly used without permission. Such cases highlight the legal complexities surrounding AI, prompting firms like Pepsico to acknowledge the risks associated with unauthorized use of third-party content.
Ray Eitel-Porter, an AI governance expert, noted that companies often perceive AI as a risk because they are unaccustomed to relying on systems that may not deliver guaranteed results. Alongside cybersecurity, businesses express fears regarding the potential failure of their AI initiatives. Even Meta, a leader in the AI space with a market capitalization that has surged over 600 percent since the onset of the AI trend, has voiced concerns about the efficacy of its AI projects. In a government filing, Meta stated, “There can be no assurance that the usage of AI will enhance our products or services or be beneficial to our business.”
The landscape for AI in major corporations remains fraught with challenges and uncertainties. As businesses navigate the complexities of AI adoption, the pressure to demonstrate its value continues to mount, leaving many executives in a precarious position. The coming months may reveal whether AI can fulfill its promised potential or if it will remain a source of speculation and risk in the corporate world.
