54% of companies use AI to cut costs, not chase hype

More than half of infrastructure and operations leaders are using AI to cut spending, according to new Gartner research, with 54% focusing on practical automation rather than flashy applications. The findings signal a shift toward “frumpy but functional” AI implementations that prioritize measurable returns over technological showmanship, as budget constraints emerge as the primary barrier to AI adoption.

What you should know: Gartner, a market research firm, surveyed 253 infrastructure and operations (I&O) employees across the US, UK, India, and Germany to understand how organizations are implementing AI and what challenges they face.

• 54% of infrastructure and operations leaders are using AI specifically to reduce spending.
• 50% cited budget constraints as their biggest AI bottleneck.
• 48% identified integration difficulties as a major challenge.

The big picture: The AI industry is experiencing a sobering-up period as businesses move away from hype-driven implementations toward practical applications that deliver clear returns on investment.

• MIT research shows that up to 95% of businesses using AI are not seeing significant returns on their investments.
• The profitable 5% are focusing on automating “back-office” tasks rather than high-visibility use cases.
• Forrester, another market research firm, recently argued that AI hype is yielding to an era of more practical, less sensational applications.

Why this matters: Basic AI implementations for infrastructure and operations could be the surest path to profitability, even if they lack the glamour of customer-facing applications.

• Organizations that automate routine operations are finding more reliable returns than those chasing headline-grabbing AI projects.
• The shift represents a maturation of AI adoption strategies across industries.

What experts recommend: Gartner advises I&O leaders to start small with high-value, feasible pilots rather than pursuing ambitious AI projects.

• “Rather than chasing big AI projects, they should start with high-value, feasible pilots and flexible upgrades,” said Melanie Freeze, Gartner Research Director.
• Organizations could use GenAI for cloud cost management to “automatically analyze cloud billing, resource usage and infrastructure efficiency.”

Security concerns remain: Multiple studies highlight ongoing challenges with AI safety and data protection that may be hampering adoption.

• Only 40% of organizations using AI have implemented concrete safety policies and guardrails, according to research by SAS, a data analytics company, and IDC, a technology research firm.
• The National Cybersecurity Alliance found that 43% of workers have shared sensitive information with AI, including financial and client data.
• The lack of proper safeguards creates uncertainty that undermines organizations’ ability to maximize their AI investments.