• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Trendingnow

1

As Big Tech showers employees with perks to win the talent war, Nvidia built a nearly $5 trillion company by making people pay for their own lunch

2

MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year

3

The Supreme Court's birthright citizenship ruling hands the U.S. economy a $7.7 trillion win

1

As Big Tech showers employees with perks to win the talent war, Nvidia built a nearly $5 trillion company by making people pay for their own lunch

2

MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year

3

The Supreme Court's birthright citizenship ruling hands the U.S. economy a $7.7 trillion win
CommentaryAI

Here’s the real reason 75% of corporate AI initiatives fail

By
Nada R. Sanders
Nada R. Sanders
Down Arrow Button Icon
By
Nada R. Sanders
Nada R. Sanders
Down Arrow Button Icon
October 1, 2024, 12:15 PM ET
Nada R. Sanders, Ph.D., is an internationally recognized AI thought leader and expert in forecasting and global supply chain intelligence. Ranked in the world’s top 2% of scientists, she’s the author of 100-plus scholarly publications and seven books, including The Humachine: AI, Human Virtues, and the Superintelligent Enterprise.
Applying new technology to old business models doesn't guarantee success.
Applying new technology to old business models doesn't guarantee success.Getty Images
Add Fortune on Google for similar content.

Business leaders are rushing to harness the quasi-magical powers of artificial intelligence (AI), with a projected annual spend of $60 billion on AI models by 2026. Yet, revenue from AI is only expected to reach about $20 billion per year by that point, flagging a substantial gap between investment and returns. In fact, recent studies show that roughly 75% of AI initiatives don’t succeed.

Since the launch of generative AI, we’ve been conducting extensive research involving CEO interviews and deep dives within leading companies. This work has provided inside knowledge about the success of AI initiatives and has culminated in the book The Humachine. Here are some of these insights.

One AI doesn’t fit all

AI is copyable—and one size doesn’t fit all. What’s not copyable is a unique business model, processes, and integration of humans with that technology.

Our research finds that the massive rush to apply AI technologies to existing business models and old processes will not lead to success.

Spencer Fung, the CEO of global supply chain giant Li & Fung, provides an analogy: “Companies acquiring AI without a new business model is like a company digitizing a horse and carriage—while the competition has created a digital automobile.”

Adding AI to a business model of the past doesn’t lead to competitiveness—it simply solidifies old processes. AI is essential but insufficient in providing a competitive advantage. Before attempting to integrate AI into their businesses, corporate leaders need to first reassess and update their business models.

The data doesn’t hold up amid volatility

AI is based on historical data that may not be reliable in unpredictable and ever-changing global business environments.

“Every math-based model collapsed when the pandemic hit. None of the assumptive parameters could be trusted,” as John Sicard, the CEO of supply chain software leader Kinaxis, told us.

Business decisions aren’t made in a vacuum separate from issues of labor, inflation, and geopolitics. Experienced workers bring domain expertise and deep knowledge of their environment. They step in when digital analyses aren’t enough much like a pilot taking control under unusual circumstances.

This knowledge is essential—and ignoring its value is fraught with peril. Sicard sums it up with this warning: “Blind obedience to the model is dead. It led us off a cliff during the pandemic. It is reckless.”

This echoes our recent discussion with chess grandmaster Garry Kasparov, the first chess player defeated by a computer. Though Kasparov concludes that machines are better than humans in 95% of cases, humans must know when and how to intervene the remaining 5% of the time. That’s critical.

Kasparov notes that advantage comes to the person who knows when to rely on gut instinct and intuition. That’s the difference between a good decision-maker and a great one. “A little tweak here and there has the highest return. We don’t have to challenge machine superiority in 95% of the cases. But we do in the other 5%,” he explained.

It’s also important to know when to be humble enough to allow algorithms to work autonomously. AI tools lack the ability to understand context—but we shouldn’t.

This insight helps leaders grasp the essential human elements that drive successful AI implementations. As Ted English, the former CEO of TJX Companies, a Fortune 100 apparel and home fashion retailer, says, leadership demands “a lot of instinct, experience, and knowledge. You can’t get that from a machine.”

AI requires new human skills

As AI becomes commonplace, companies need to cultivate new human skills among their workforce. In our executive interviews, we repeatedly heard that the new competitive advantage comes down to “human interpersonal skills,” “human creativity,” and “personal relationships.”

Peter Cameron, the CEO of Lenox, told us, “Nothing replaces long-term relationships that are personal—and the longer the relationship is, the better.”

Rod Harl, the CEO of Alene Candles, a company with 80% revenue growth over five years, shared that their best decision was investing in training employees on interpersonal skills and mindfulness techniques. Combining these skills with human creativity, Harl notes, “is the secret sauce.”

As Maria Villablanca, co-founder and CEO of Future Insight Network, put it: “Companies need people who can be creative and innovative in the way they find solutions. Companies need creative problem solvers with interpersonal skills. Machines cannot compete with that.”

As AI takes over more tasks, there’s a risk of skill atrophy and loss of knowledge. In addition to holding onto experienced talent, companies need to consider paths to develop decision-making skills across their human resources.

Today, the human skills deemed most critical by leaders are interpersonal skills: basic conflict resolution, communication, emotional detachment, and mindfulness practices. While digital literacy is expected, effective interpersonal skills are the priority. These uniquely human skills are in short supply—and may require training.

More must-read commentary published by Fortune:

  • An economic catastrophe is lurking beneath Russia’s GDP growth as Putin ‘throws everything into the fireplace’
  • EPA administrator: Rolling back Biden-Harris infrastructure and climate investments would mean backlash in American communities
  • ‘Godmother of AI’ says California’s well-intended AI bill will harm the U.S. ecosystem
  • We keep celebrating low unemployment—but data shows jobs and economic activity have been shifting to big business

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.

About the Author
By Nada R. Sanders
See full bioRight Arrow Button Icon
Add Fortune on Google for similar content.

Latest in Commentary

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • Pinterest icon

Latest in Commentary

senate
CommentaryCongress
One rare bipartisan AI bill is moving through Congress. Here’s why it deserves to pass
By Neil Björkman and Betsy BrewerJuly 1, 2026
16 hours ago
I know how Gen Z can survive the ‘jobpocalypse’ because I built an AI company — in 2015
CommentaryCareers
I know how Gen Z can survive the ‘jobpocalypse’ because I built an AI company — in 2015
By Jeremy FainJuly 1, 2026
17 hours ago
mr
Commentary250 Years of Innovation
America needs 3.8 million manufacturing workers. This CEO has a blueprint to find them
By Mark RayfieldJuly 1, 2026
17 hours ago
usa
Commentary250 Years of Innovation
America at 250: why the Constitution was built to restrain government, not celebrate majority rule
By Steve H. HankeJuly 1, 2026
17 hours ago
t
CommentaryMedia
Netflix could turn NBC into its biggest bet yet — and this time, the math actually works
By Jeffrey Sonnenfeld and Steven TianJune 30, 2026
1 day ago
wb
CommentaryLeadership
I grew BDO from $600 million to $3.4 billion. Here’s the 3-part formula that made it possible
By Wayne BersonJune 30, 2026
2 days ago

Most Popular

As Big Tech showers employees with perks to win the talent war, Nvidia built a nearly $5 trillion company by making people pay for their own lunch
Big Tech
As Big Tech showers employees with perks to win the talent war, Nvidia built a nearly $5 trillion company by making people pay for their own lunch
By Marco Quiroz-GutierrezJuly 1, 2026
20 hours ago
MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year
Success
MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year
By Sydney LakeJune 25, 2026
7 days ago
The Supreme Court's birthright citizenship ruling hands the U.S. economy a $7.7 trillion win
Newsletters
The Supreme Court's birthright citizenship ruling hands the U.S. economy a $7.7 trillion win
By Diane BradyJuly 1, 2026
18 hours ago
Philanthropy leader at Warren Buffett and Bill Gates’ Giving Pledge says children of billionaires are pushing them to give their wealth away faster
Success
Philanthropy leader at Warren Buffett and Bill Gates’ Giving Pledge says children of billionaires are pushing them to give their wealth away faster
By Preston ForeJune 27, 2026
5 days ago
Elon Musk on MacKenzie Scott giving away $26 billion of her fortune: 'Sadly,' it makes the world a worse place
Success
Elon Musk on MacKenzie Scott giving away $26 billion of her fortune: 'Sadly,' it makes the world a worse place
By Sydney LakeJune 29, 2026
2 days ago
Current price of oil as of July 1, 2026
Personal Finance
Current price of oil as of July 1, 2026
By Joseph HostetlerJuly 1, 2026
14 hours ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.