Generative AI in the Enterprise Fuels Shadow IT Boom, According to MIT
A recent report from MIT NANDA (The GenAI Divide: State of AI in Business 2025) paints a sobering picture of generative AI’s current impact on businesses. Despite investments of $30 to $40 billion, a staggering 95% of generative AI projects fail to deliver a positive return on investment. Only a mere 5% of these initiatives manage to create measurable value, highlighting a significant chasm between investment and realized benefits. This has particularly relevant implications for African tech companies, which might struggle to compete with more advanced, strategic implementations of GenAI.
Mass Adoption, Limited Transformation
The report reveals that over 80% of organizations have already experimented with or deployed tools like ChatGPT or Copilot. However, these implementations are largely restricted to boosting individual productivity gains. This results in a minimal impact on overall revenue. Custom-built solutions, which are more complex, struggle to move beyond the pilot phase. Only 5% of these tailored projects successfully reach production. This points to a “GenAI Divide” where a vast majority of companies are engaged in experimentation without driving genuine transformation, whilst a smaller group leverages AI strategically.
The Rise of “Shadow AI”
The report underscores a critical issue: employees are circumventing existing IT protocols to access and utilize generative AI tools. This “shadow AI” trend further complicates the already challenging landscape of AI adoption and implementation. This shadow AI can also pose security risks and compliance issues for African businesses, especially those with evolving regulatory frameworks.
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