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ZDNET Highlights
- Boards are starting to ask tough questions about the money sunk into AI.
- The questioning of the value of AI projects is an opportunity to refocus.
- Focus on capacity building, strong partnerships and co-development.
The amount of money organizations invest in AI shows no signs of slowing down. Spending on AI around the world Projected to reach $2.52 trillion in 2026That’s a 44% increase year-over-year, according to tech analyst Gartner.
However, there is a twist in the story. With AI slipping into the abyss Gartner’s Hype Cycle for Emerging TechnologiesBoards are starting to ask tough questions about money spent on AI explorations, and digital and business professionals will be expected to convert dollars and cents into tangible profits.
Also: 5 ways you can stop testing AI and start scaling it responsibly in 2026
ZDNET reported last year that many areas of AI have headed into a trough of disillusionment, where interest in the technology wanes as explorations fail to deliver promised returns. This is where generic AI finds itself right now, with the hype fading and business leaders questioning the ROI.
Many organizations have barely found a way to make the most of technology. Now, interest in General AI appears to be waning, and the bubble surrounding the emerging technology is about to burst. Sounds like bad news, right?
Yet John-David Lovelock, Gartner’s chief forecaster and distinguished VP analyst, told ZDNET in a one-on-one interview that the slide should be seen as a sign of hope. Slipping into the trough allows everyone to think more carefully about their investments in General AI. In short, businesses and digital professionals should take advantage of the opportunity.
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“Maybe they should look into pushing AI into the abyss,” he said. “The pitfall is that expectations are at an all-time low. And the problems we’ve seen with AI in the last two years are tied to these over-the-top moonshot projects.”
With MIT research showing that 95% of Gen AI projects fail to deliver value, Lovelock said a new approach is needed to ensure AI investments are focused on the right goals. He suggested that the following three areas should be given priority by 2026.
1. Focus on capacity building
Gartner reports that large-scale construction of AI infrastructure will characterize emerging technology investments by 2026.
The creation of the AI Foundation alone will increase spending on AI-optimized servers by 49%, accounting for 17% of AI spending this year. Meanwhile, AI infrastructure will add $401 billion in spending in 2026, as technology providers lay their foundation.
Also: 6 reasons why autonomous enterprises are still more a fantasy than a reality
Lovelock said that this investment by IT companies will be important, even if AI has fallen into disillusionment. “They are building the capacity needed to drive all the AI that is coming,” he said.
“This is an area where we have hyperscalers, technology providers, and even software companies buying AI-optimized servers to build data centers that provide the ability to train new models, train agents, and run agents.”
Lovelock gave the example of a finance organization that is exploring the ability to run a model that automates credit card approval.
The organization has several options – it can run its own standalone data center; Work with a big-name cloud provider like AWS, Microsoft, or Google; Focus on one platform provider that manages the computation; Or make an API call to a larger language model from an expert like OpenAI.
Also: 5 ways Lenovo’s AI strategy can drive real results for you, too
The key to success, Lovelock said, is to determine how the provider’s capacity-building approach fits with your organization’s resources and priorities.
“You need to ask, ‘How deeply do I need this technology? How much can I treat it as a commodity? And how much is our approach about separating out the AI we must own, operate, and build?'”
2. Build strong partnerships
Finding appropriate answers to these types of questions will involve building close relationships with technology providers.
Lovelock suggested that these partnerships will be important for businesses and digital professionals looking to improve AI ROI by 2026.
“This year, most people should be looking for technology to come from their established partner stack,” he said. “It is only the leaders, the visionaries, who should focus on developing or pursuing AI solutions themselves.”
Also: AI isn’t just getting smarter, it’s becoming more power-hungry and expensive
With AI being in the throes of disillusionment throughout 2026, it will often be sold to companies by their existing software providers rather than bought for a moonshot project.
Rather than spending time and money on developing custom solutions, Lovelock agreed that most companies should focus on making good bets this year on solid technology partners in the digital and data stack.
“It’s absolutely perfect,” he said. “It’s about finding your technology partners to lead you on your path, whether that’s simple use of AI or moving you toward becoming an autonomous business.”
3. Avoid random exploration
With General AI stuck in the throes of disillusionment, Gartner suggests that professionals should avoid extensive exploration into emerging technology and instead focus on ensuring that their best moonshot projects reach for the stars.
So, how can digital leaders and their business partners ensure that exploratory projects turn into valuable initiatives? Lovelock suggests focusing on three areas: “partners, data, and processes.”
He said another important element is to bring together internal stakeholders for the journey from the moon to the stars.
“Success also depends on business operations,” he said. “How well are you focused on defined business outcomes? How well can your partners help you meet these needs? What level of investment do they have?”
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Lovelock said the best relationships will ensure that turning moonshots into valuable production services will benefit you and your supplier.
“If you’re doing time-and-materials billing, your provider doesn’t have a role in this game. If you’re doing value-based pricing, they have something. If you’re doing outcome-based pricing, they have a lot more. If you’re co-developing, that’s great,” he said.
“The best way is to tie their reward to their results. Now, this is not easily accomplished. It’s a hard way to sell across an organization. It’s a very deep and difficult relationship to maintain over time. But when it works, it’s incredible and deeply rewarding for both participants.”
