**Corporate AI Spending Hits a Roadblock**
A surprising trend is emerging in corporate America: companies are starting to dial back their enthusiasm for deploying AI technology everywhere, a practice known as “tokenmaxxing” that’s been criticized for being more about checking a box than genuinely improving operations. The shift away from this fad has less to do with a change of heart about the potential of AI and more about the cold hard reality of the costs associated with it.
According to data from research firm Gartner, 80% of businesses that invested in AI between 2020 and 2022 saw costs rise without a corresponding increase in productivity. The numbers are eye-opening: the average annual cost of implementing AI rose by 45% over that period, while the benefits of such investments were limited to a 5% increase in efficiency.
A Glimpse into the Tokenmaxxing Fad
Tokenmaxxing, for those unfamiliar, involves slapping an AI logo on a product or service, even if it doesn’t necessarily make use of genuine AI capabilities. This can be seen as a form of corporate greenwashing, where businesses prioritize looking innovative over actually being innovative. This phenomenon was particularly prevalent in the post-pandemic era, as executives scrambled to demonstrate their relevance in a rapidly changing business landscape.
The result was a proliferation of AI-powered products and services that were often little more than buzzwords masquerading as substance. From AI-generated marketing content to AI-driven chatbots, the emphasis was on appearance over actual functionality.
A Shift in Priorities
As the costs associated with AI start to mount, businesses are facing an uncomfortable reality: they’ve been throwing money at a problem without seeing a tangible return on investment. As a result, companies are taking a step back and reevaluating their AI strategies, focusing on more practical and effective applications that deliver real value.
What this means for businesses: it’s time to get real about AI. Rather than trying to check every box and make every product or service somehow “AI-enabled,” companies need to focus on where AI can genuinely make a difference in their operations. This is a shift back to pragmatism, where the emphasis is on actual performance over showy marketing.
