Over 80% of Companies Report No Productivity Gains from AI Despite Billions in Investment

Over 80% of companies report no productivity gains from AI so far despite billions in investment, survey suggests -- 6,000 executives also reveal 1/3 of leaders use AI, but only for 90 minutes a week

AI isn't having a huge impact on productivity yet, but hopes are still high AI is the buzzword of the era, and, much like the enthusiasm of the early dot-com years, billions of dollars worth of investment is being plowed into tools for workers aimed at improving productivity and cutting employment costs. Unfortunately, a new survey of over 6,000 executives from firms across Europe and the US shows that the majority believe AI has had little impact on their business operations so far. The survey, published by the National Bureau of Economic Research (h/t Fortune), reveals the disparity between expectation and reality. While 70% of the businesses questioned were actively using AI, over 80% of them report no impact on company productivity or on employment. That's despite a belief among the majority of those questioned that AI will boost productivity by 1.4%, reduce headcount by 0.7%, and increase output by 0.8% over the next three years. Among the executives themselves, a third of those surveyed reported using AI in the workplace, but the usage amounted to only 1.5 hours per week on average. A quarter of those surveyed didn't use AI at all - at least, not yet. The contrast between the adoption of AI and its impact on business is an interesting callback to the challenges of decades past, where the introduction of the microcomputer radically changed how businesses operated. The so-called Solow's productivity paradox, named after the economist who spotted the trend, saw that the extra admin caused by information overload created by computers actually slowed productivity among workers between the 1970s and 1980s. Productivity growth was steady at 2.9% between 1948 to 1973, but dropped to 1.1% afterwards, with improvements not seen again until the late 1990s and early 2000s. Similarly, a recent AI survey revealed that AI usage could actually increase burnout in employees. Regardless, AI is continuing to prove to be an epoch-making disruptive technology that the executive class has firmly embraced, with AI firms capturing 61% of global venture capital investment in 2025, totalling $258.7 billion. Meanwhile, companies like Microsoft continue to go all-in on AI, with Microsoft's AI boss believing the technology can replace all white-collar jobs within 18 months. The contradiction - and optimism - among execs proves that AI in the workplace is firmly entrenched, but only time will tell as to whether it has the positive impact that they, and the economy on the whole, will be hoping for. Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds.

Thousands of CEOs just admitted AI had no impact on employment or productivity -- and it has economists resurrecting a paradox from 40 years ago | Fortune

In 1987, economist and Nobel laureate Robert Solow made a stark observation about the stalling evolution of the information age: Following the advent of transistors, microprocessors, integrated circuits, and memory chips of the 1960s, economists and companies expected these new technologies to disrupt workplaces and result in a surge of productivity. Instead, productivity growth slowed, dropping from 2.9% from 1948 to 1973, to 1.1% after 1973. New-fangled computers were actually, at times, producing too much information, generating agonizingly detailed reports and printing them on reams of paper. What had promised to be a boom to workplace productivity was, for several years, a bust. This unexpected outcome became known as Solow's productivity paradox, thanks to the economist's observation of the phenomenon. "You can see the computer age everywhere but in the productivity statistics," Solow wrote in a New York Times Book Review article in 1987. New data on how C-suite executives are -- or aren't -- using AI shows history is repeating itself, complicating the similar promises economists and Big Tech founders made about the technology's impact on the workplace and economy. Despite 374 companies in the S&P 500 mentioning AI in earnings calls -- most of which said the technology's implementation in the firm was entirely positive -- according to a Financial Times analysis from September 2024 to 2025, those positive adoptions aren't being reflected in broader productivity gains. A study published this month by the National Bureau of Economic Research found that among 6,000 CEOs, chief financial officers, and other executives from firms who responded to various business outlook surveys in the U.S., UK, Germany, and Australia, the vast majority see little impact from AI on their operations. While about two-thirds of executives reported using AI, that usage amounted to only about 1.5 hours per week, and 25% of respondents reported not using AI in the workplace at all. Nearly 90% of firms said AI has had no impact on employment or productivity over the last three years, the research noted. However, firms' expectations of AI's workplace and economic impact remained substantial: Executives also forecasted AI will increase productivity by 1.4% and increase output by 0.8% over the next three years. While firms expected a 0.7% cut to employment over this time period, individual employees surveyed saw a 0.5% increase in employment. In 2023, MIT researchers claimed AI implementation could increase a worker's performance by nearly 40% compared to workers who didn't use the technology. But emerging data failing to show these promised productivity gains has led economists to wonder when -- or if -- AI will offer a return on corporate investments, which swelled to more than $250 billion in 2024. "AI is everywhere except in the incoming macroeconomic data," Apollo chief economist Torsten Slok wrote in a recent blog post, invoking Solow's observation from nearly 40 years ago. "Today, you don't see AI in the employment data, productivity data, or inflation data." Slok added that outside of the Magnificent 7, there are "no signs of AI in profit margins or earnings expectations." Slok cited a slew of academic studies on AI and productivity, painting a contradictory picture about the utility of the technology. Last November, the Federal Reserve Bank of St. Louis published in its State of Generative AI Adoption report that it observed a 1.9% increase in excess cumulative productivity growth since the late-2022 introduction of ChatGPT. A 2024 MIT study, however, found a more modest 0.5% increase in productivity over the next decade. "I don't think we should belittle 0.5% in 10 years. That's better than zero," study author and Nobel laureate Daron Acemoglu said at the time. "But it's just disappointing relative to the promises that people in the industry and in tech journalism are making." Other emerging research can offer reasons why: Workforce solutions firm ManpowerGroup's 2026 Global Talent Barometer found that across nearly 14,000 workers in 19 countries, workers' regular AI use increased 13% in 2025, but confidence in the technology's utility plummeted 18%, indicating persistent distrust in the technology. Nickle LaMoreaux, IBM's chief human resources officer, said last week the tech giant would triple its number of young hires, suggesting that despite AI's ability to automate some of the required tasks, displacing entry-level workers would create a dearth of middle-management down the line, endangering the company's leadership pipeline. To be sure, this productivity pattern could reverse. The IT boom of the 1970s and '80s eventually gave way to a surge of productivity in the 1990s and early 2000s, including a 1.5% increase in productivity growth from 1995 to 2005 following decades of slump. Slok saw the future impact of AI as potentially resembling a "J-curve" of an initial slowdown in performance and results, followed by an exponential surge. He said whether AI's productivity gains would follow this pattern would depend on the value created by AI. So far, AI's path has already diverged from its IT predecessor. Slok noted in the 1980s, an innovator in the IT space had monopoly pricing power until competitors could create similar products. Today, however, AI tools are readily accessible as a result of "fierce competition" between large language model-buildings driving down prices. Therefore, Slok posited, the future of AI productivity would depend on companies' interest in taking advantage of the technology and continuing to incorporate it into their workplaces."In other words, from a macro perspective, the value creation is not the product," Slok said, "but how generative AI is used and implemented in different sectors in the economy."

Despite massive AI push, over 90% firms see no impact on jobs or output: Survey

A recent NBER study reveals that despite widespread adoption, AI has had a limited immediate impact on employment and productivity for most firms. While two-thirds of companies use AI, usage is minimal, with over 90% reporting no change in jobs or output. However, executives anticipate future productivity and output increases, with some expecting job reductions. Despite the global corporate push to adopt artificial intelligence (AI) for cost-cutting and improved profitability, a recent study by the National Bureau of Economic Research (NBER) suggests the technology's immediate impact has been limited. After surveying nearly 6,000 top executives across the US, UK, Germany and Australia, researchers found that more than 90 per cent of firms reported no change in employment or productivity over the past three years. Two-thirds of the executives said their companies are using AI, but the average usage remains low at just 1.5 hours per week. Around 25 per cent of respondents said AI is not being used in their workplace at all. "On average, more than 90 per cent of business managers across the four countries estimate no impact of AI on their employment over the past three years. 89 per cent report no impact of AI on their labour productivity (measured as volume of sales per employee) over the last three years," the study highlighted. Despite the limited short-term impact, firms remain optimistic about AI's future role in workplaces. Executives expect productivity to increase by 1.4 per cent and output to rise by 0.8 per cent over the next three years. Nearly 75 per cent of businesses anticipate adopting some form of AI technology within this period. "Given over 250 million people in employment over these four countries, firm executives therefore expect AI will lead to about 1.75 million fewer jobs by 2028 at existing firms," the study stated. At present, the most widely cited applications of AI include text generation using large language models, followed by visual content creation and data processing through machine learning. This is not the first study to question AI's immediate productivity gains. A report published last year by the Massachusetts Institute of Technology (MIT) found that 95 per cent of organisations that implemented AI systems saw no return on their investment. "Despite $30-40 billion in enterprise investment into GenAI, this report uncovers a surprising result in that 95 per cent of organisations are getting zero return," the report titled *The GenAI Divide: State of AI in Business 2025* highlighted. The MIT study examined 300 AI deployments and involved interviews with around 350 employees. AI tools such as ChatGPT and Microsoft Copilot were among the most widely adopted. However, only five per cent of integrated AI pilots are extracting significant financial value, while the majority remain stuck with no measurable profit and loss (P&L) impact. (You can now subscribe to our Economic Times WhatsApp channel)