AI Pullback Has Officially Started

People are beginning to confront the reality of AI, and they are not happy.

Photo by BoliviaInteligente on Unsplash

The gulf between actual AI performance and AI hype is deep and cavernous, and we have the data to prove it. A recent MIT report found that 95% of AI pilots didn’t increase a company’s profit or productivity. A recent METR report also found that AI coding tools actually slow developers down. Why? Well, generative AI models, even the very latest ones, often get things wrong and “hallucinate”, which requires considerable human oversight to correct. IT consultants Gartner attempted to quantify this and found that AI agents fail to complete office tasks around 70% of the time. Simply put, the amount of human oversight necessary, even for simple tasks, almost always undermines whatever productivity gains are made. In other words, in the vast majority of cases, it is more productive not to use AI than to use AI. Yet despite all the evidence, AI is still being shoehorned in everywhere and being praised as the next industrial revolution. Or is it? Because there is also mounting data that the world is beginning to turn its back on this questionable technology.

Possibly the best example of this is a new report from Wiley.

This is their second ExplanAItions study, which aims to assess how AI is being used and perceived in the academic world. The differences between this year’s report and last year’s are shocking.

Back in 2024, 54% of researchers used AI — that figure jumped up to 84% this year. But, while 53% of researchers in 2024 said that AI was already exceeding human capabilities in the use cases Wiley tested, that figure fell to less than a third, which is a considerable drop-off. In 2024, only 51% of researchers were worried about hallucinations (also known as errors); that figure rose to 64% in 2025, despite new supposedly better models coming out.

The report concludes that researchers are “coming to a better understanding of AI’s present limits and future potential” and are seriously reassessing how they use it and plan to use it.

Now, Wiley did acknowledge that the 2025 study contained half of the same respondents as in their 2024 study, suggesting that there may be some selection bias here. But this could also be explained by researchers moving away from using AI, leading to fewer people responding as they have dropped the technology. Regardless, there are plenty of other studies that support the 2025 study’s conclusion.

For example, recent analysis has found that the AI adoption rate in large companies (250 employees or more) has dropped. Earlier this year, it was 14%; now it has dropped to 12%, which is not an insignificant slowdown, considering this isn’t reflected in the stock market and media hype around AI.

This slowdown is made worse by the fact that the number of companies scrapping their AI initiatives has skyrocketed. Recent analysis found that back in 2024, only 17% were cancelled, meaning real-world ongoing use of AI was climbing fast. However, this year, the rate has surged to a staggering 42%. This, combined with the slowdown in AI adoption, means real-world corporate use of AI is witnessing a marked decline.

It isn’t surprising, as we are seeing key players getting hurt by their reckless AI adoption.