The Difference Engine | B2B Category Design | Private Equity | Venture Capital 63. What does the MIT report actually tell us about the AI industry?
Nov 5, 2025
A recent MIT report reveals a shocking 95% failure rate for generative AI pilot projects, igniting discussions about the industry's viability. The hosts examine the implications of this data, including its impact on societal perceptions and economic realities. They also explore Hermann Hauser’s insights on Europe's tech landscape and the challenges of scaling startups. Plus, is ChatGPT nearing its peak? The conversation dives into its rapid growth, potential for monetization, and the looming threat of 'crapification' as platforms prioritize profit over user value.
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Don't Overread Early AI Failure Rates
- The MIT State of AI report claiming ~5% pilot success is influential but limited by sample size and hype.
- Early-stage tech often shows low success rates yet still drives valuable experimentation and learning.
Biases Shape AI Narratives
- Cognitive and cultural biases like recency and anchoring shape how people interpret AI reports and hype.
- These biases can freeze public opinion on incomplete data, amplifying extreme narratives.
Keep Experimenting With AI
- Keep experimenting despite low early hit rates; 5% early success can still justify continued investment.
- Treat current AI deployment as societal experiments that require active participation and governance.
