Gartner Predicts 40% of Agentic AI Projects to Fail by 2027, Citing Hype and Unclear Value

Over 40% of agentic AI projects will be scrapped by 2027, Gartner says

June 25 (Reuters) - More than 40% of agentic artificial intelligence projects will be canceled by the end of 2027 due to escalating costs and unclear business value, according to a report by Gartner. WHY IT'S IMPORTANT Tech giants such as Salesforce (CRM.N), opens new tab and Oracle (ORCL.N), opens new tab have embraced AI agents, systems that can autonomously complete goals and take action, pouring billions into the technology in the hopes of boosting margins and optimizing costs. Many vendors are engaging in "agent washing" - the rebranding of products such as AI assistants and chatbots without significant agentic capabilities, Gartner says, estimating that only about 130 of the thousands of agentic AI vendors are real. KEY QUOTES "Most agentic AI projects right now are early stage experiments or proofs of concept that are mostly driven by hype and are often misapplied," said Anushree Verma, Senior Director Analyst at Gartner. "Most agentic AI propositions lack significant value or return on investment, as current models do not have the maturity and agency to autonomously achieve complex business goals or follow nuanced instructions over time," Verma said. BY THE NUMBERS Gartner predicts at least 15% of day-to-day work decisions will be made autonomously through agentic AI by 2028, up from 0% in 2024. Additionally, 33% of enterprise software applications will include agentic AI by 2028, up from less than 1% in 2024. Reporting by Zaheer Kachwala in Bengaluru; Editing by Arun Koyyur Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Agentic AI is all hype for now, says Gartner

Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. The big picture: Everyone in the tech industry is talking about agentic AI. This supposed next-generation evolution of large language model technology is expected to revolutionize everything, but analysts aren't convinced that future will become a reality. It's much easier to talk about and hype up AI "agents" than it is to actually build one. Gartner has predicted that over 40 percent of so-called agentic AI projects will be canceled by the end of 2027. The technology is too expensive, has unclear business value, and is often poorly suited to real-world use cases, frequently hindering organizations rather than helping them. And that's just the beginning. Agentic AI is supposed to represent a major leap forward from today's chatbots and AI services, enabling "intelligent" bots that can make autonomous decisions aligned with company goals. These agents are fueling a surge in AI spending, and tech companies are capitalizing on the hype by raising prices for their customers. In theory, AI agents should be able to configure Windows, browse the web, or even write code on a user's behalf. But none of these so-called revolutions are truly happening, Gartner warns. Most agentic AI projects remain early-stage experiments or proof-of-concept demos driven more by hype than by practical results. These systems are often misused by organizations that underestimate their cost and complexity, which ultimately prevents many projects from ever reaching production. Also see: AI Agents Explained Gartner polled 3,412 webinar participants in January 2025, asking how their organizations were approaching the agentic AI revolution. Just 19 percent reported making significant investments in AI agents, while 42 percent were taking a more conservative approach. A small minority (eight percent) had made no investments at all, and 31 percent were either unsure or adopting a wait-and-see strategy. The ongoing hype surrounding agentic AI is also being inflated by what Gartner calls "agent washing." Many companies are simply rebranding existing technologies - such as chatbots, robotic process automation, and virtual assistants - as cutting-edge agentic AI. In reality, only around 130 out of thousands of so-called "AI agents" assessed by Gartner exhibited genuine agentic capabilities. "Most agentic AI propositions lack significant value or return on investment, as current models don't have the maturity and agency to autonomously achieve complex business goals or follow nuanced instructions over time," Gartner's Senior Director Analyst Anushree Verma stated. Despite the inflated expectations and questionable implementations, agentic AI could still offer tangible value if organizations are able to deploy and manage it effectively. According to Gartner's forecast, AI bots will be responsible for at least 15 percent of day-to-day decision-making by 2028, up from virtually zero in 2024. Additionally, a third of enterprise software tools are expected to incorporate agentic AI capabilities by 2028, compared to just one percent in 2024. While AI hasn't exactly transformed call centers as promised, its next chapter - with agentic AI - might have a brighter future.

Gartner Predicts that Over 40% of Agentic AI Projects Will Be Discontinued by 2027 | AIM

Most agentic AI projects right now are early-stage experiments or proof of concepts that are mostly driven by hype and are often misapplied," said Anushree Verma, senior director analyst at Gartner. Even as enterprises are moving steadily towards adopting generative AI and agentic AI systems, Gartner's latest report predicts that more than 40% of agentic AI projects will be discontinued by the end of 2027. This will be driven by rising expenses, vague business benefits, or insufficient risk management. In a poll conducted by Gartner in January 2025 with 3,412 webinar participants, 19% reported that their organisation had made substantial investments in agentic AI, 42% had made cautious investments, 8% had not invested at all, while the remaining 31% were either taking a wait-and-see stance or were uncertain. Many vendors are fueling the excitement through "agent washing," which involves rebranding existing products like AI assistants, robotic process automation (RPA), and chatbots, despite lacking genuine agentic features. Gartner estimates that only around 130 of the thousands of agentic AI vendors possess legitimate capabilities. "Most agentic AI projects right now are early-stage experiments or proof of concepts that are mostly driven by hype and are often misapplied," said Anushree Verma, senior director analyst at Gartner. "This can blind organisations to the real cost and complexity of deploying AI agents at scale, stalling projects from moving into production." Major technology companies like Salesforce and Oracle have adopted AI agents, which are systems capable of independently achieving objectives and taking action. They are investing billions into this technology to improve profit margins and optimise expenses. Despite initial challenges, the rise of agentic AI marks a significant advance in AI capabilities and market potential, the report says. It will enhance resource efficiency, automate complex tasks, and foster new business innovations, exceeding the capabilities of basic automation bots and virtual assistants. Gartner forecasts that by 2028, 15% of daily work decisions will be made autonomously through agentic AI, up from 0% in 2024. Additionally, 33% of enterprise software applications are expected to feature agentic AI by 2028, compared to under 1% in 2024. "Most agentic AI propositions lack significant value or return on investment (ROI), as current models don't have the maturity and agency to autonomously achieve complex business goals or follow nuanced instructions over time," said Verma. "Many use cases positioned as agentic today don't require agentic implementations."

Why Hype May Be Harming AI's Reputation and Workplace Use Rates

A trio of new reports suggest much of the celebratory noise around today's AI may be unmerited, and possibly ill-advised. The first of those warnings came from executive and technology advisory firm Gartner, based on its poll of 3,412 participants in a January webinar. Using the survey's findings, Gartner estimated that over 40 percent of all AI projects currently underway will be cancelled by 2028, due to "escalating costs, unclear business value or inadequate risk controls." That conclusion was based in part on responses from participants about their companies' AI investments. Their feedback was particularly revealing about spending on the advanced, agentic form of the tech that can autonomously analyze data, make decisions, and take action without human oversight. Despite the frequent talk of the beneficial consequences of using agentic AI, just 19 percent of participants said their companies had made a "significant" investment in the tech, with 42 percent calling that spending "conservative." About 8 percent said their business had invested nothing in those platforms, with 31 percent describing the current strategy as "wait and see."

Over 40% of agentic AI projects will be scrapped by 2027, Gartner says

By 2027, over 40% of agentic AI projects will be canceled due to high costs and unclear value, Gartner reports. Despite big investments, most offerings lack real capabilities. "Agent washing" and hype overshadow limited real-world maturity, though usage is expected to rise significantly by 2028.More than 40% of agentic artificial intelligence projects will be canceled by the end of 2027 due to escalating costs and unclear business value, according to a report by Gartner. Why is it important? Tech giants such as Salesforce and Oracle have embraced AI agents, systems that can autonomously complete goals and take action, pouring billions into the technology in the hopes of boosting margins and optimizing costs. Many vendors are engaging in "agent washing" - the rebranding of products such as AI assistants and chatbots without significant agentic capabilities, Gartner says, estimating that only about 130 of the thousands of agentic AI vendors are real. "Most agentic AI projects right now are early stage experiments or proofs of concept that are mostly driven by hype and are often misapplied," said Anushree Verma, Senior Director Analyst at Gartner. "Most agentic AI propositions lack significant value or return on investment, as current models do not have the maturity and agency to autonomously achieve complex business goals or follow nuanced instructions over time," Verma said. By the numbers Gartner predicts at least 15% of day-to-day work decisions will be made autonomously through agentic AI by 2028, up from 0% in 2024. Additionally, 33% of enterprise software applications will include agentic AI by 2028, up from less than 1% in 2024.