Abstract
Enterprises have adopted artificial intelligence (AI) faster than they have converted it into value. This paper examines why most enterprise AI projects stall between proof of concept (PoC) and production, and proposes a framework for crossing that gap. It presents a structured narrative review of nine major studies and industry surveys published between July 2024 and February 2026, including work by RAND, MIT Project NANDA, McKinsey, Gartner, IDC, S&P Global Market Intelligence, PwC and Dell Technologies, with findings coded thematically to identify recurring failure mechanisms.
Across sources, between roughly 30% and 95% of AI initiatives fail to reach production or deliver measurable value, depending on how failure is defined. IDC found that only 4 of every 33 PoCs reached production, and S&P Global reported that 42% of companies abandoned most of their AI initiatives in 2025, up from 17% in 2024. Six mechanisms explain most stalls: problem–value misalignment, data not fit for production, missing production infrastructure, unchanged workflows, governance and risk controls added too late, and weak ownership and incentives. Technical model capability is rarely the binding constraint.
The paper synthesizes this evidence into the Pilot-to-Production Readiness Model (P2P-RM), a five-dimension, gate-based framework, and extends the analysis to African enterprises, where skills, infrastructure and data-governance gaps intensify the same mechanisms. It concludes that leaders should fund fewer, production-intended pilots, define value metrics before the build, invest in shared data and deployment platforms, redesign workflows rather than bolt AI onto them, and embed governance from the first sprint.
Keywords
enterprise AI; pilot-to-production; AI scaling; generative AI; MLOps; AI governance; organizational readiness; Africa
References
Bowen, M. (2025, November 6). Dell Technologies research: AI momentum unlocks pathways to skills and scale in South Africa. Intelligent CIO Africa. https://www.intelligentcio.com/africa/2025/11/06/dell-technologies-research-ai-momentum-unlocks-pathways-to-skills-and-scale-in-south-africa/
Cohen, W. M., & Levinthal, D. A. (1990). Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35(1), 128–152. https://doi.org/10.2307/2393553
Computing. (2025, August). MIT report: 95% of corporate generative AI pilots fail to deliver returns. https://computing.co.uk/news/2025/ai/mit-report-95pc-corporate-generative-ai-pilots-fail
Gartner. (2024, July 29). Gartner predicts 30% of generative AI projects will be abandoned after proof of concept by end of 2025 [Press release]. https://www.gartner.com/en/newsroom/press-releases/2024-07-29-gartner-predicts-30-percent-of-generative-ai-projects-will-be-abandoned-after-proof-of-concept-by-end-of-2025
IDC & Lenovo. (2025). CIO playbook 2025. Lenovo. https://investor.lenovo.com/en/global/Lenovo_CIO_Playbook_2025.pdf
McKinsey & Company. (2025, November). The state of AI in 2025: Agents, innovation, and transformation. https://www.mckinsey.com/capabilities/quantumblack/our-insights/the-state-of-ai
MIT Project NANDA (Challapally, A., lead author). (2025, July). The GenAI divide: State of AI in business 2025 [Preliminary report]. MIT Media Lab. As reported in Virtualization Review (2025).
Nwakaegho, T. (2026, February 13). PwC declares AI scaling gap slows Africa’s digital transformation [Reporting PwC’s 29th Global CEO Survey: Africa perspective]. Gentechnews. https://gentechnews.com.ng/pwc-declares-ai-scaling-gap-slows-africas-digital-transformation/
Reuters. (2025, June 25). Over 40% of agentic AI projects will be scrapped by 2027, Gartner says. The Star. https://www.thestar.com.my/tech/tech-news/2025/06/25/over-40-of-agentic-ai-projects-will-be-scrapped-by-2027-gartner-says
Ryseff, J., De Bruhl, B. F., & Newberry, S. J. (2024). The root causes of failure for artificial intelligence projects and how they can succeed: Avoiding the anti-patterns of AI (RR-A2680-1). RAND Corporation. https://doi.org/10.7249/RRA2680-1
Schuman, E. (2025, March 25). 88% of AI pilots fail to reach production — but that’s not all on IT. CIO. https://www.cio.com/article/3850763/88-of-ai-pilots-fail-to-reach-production-but-thats-not-all-on-it.html
The Stack. (2025, August). What CIOs can learn from MIT’s AI report beyond the doomsday overhype. https://www.thestack.technology/what-cios-can-learn-from-mits-ai-report-beyond-the-doomsday-overhype/
Virtualization Review. (2025, August 19). MIT report finds most AI business investments fail, reveals “GenAI divide”. https://virtualizationreview.com/articles/2025/08/19/mit-report-finds-most-ai-business-investments-fail-reveals-genai-divide.aspx
Wilkinson, L. (2025, March 14). AI project failure rates are on the rise: Report. CIO Dive. https://www.ciodive.com/news/AI-project-fail-data-SPGlobal/742590/
Zirous. (2025). A clearer view of MIT’s GenAI data: What “95% of GenAI projects fail” really means. https://www.zirous.com/insights/a-clearer-view-of-mits-genai-data-what-95-of-genai-projects-fail-really-means/