The artificial intelligence industry faces a sobering reality check as Gartner predicts that over 40% of agentic AI projects will be scrapped by the end of 2027, primarily due to rising costs and unclear business value.
According to the report released on June 25, 2025, the cancellations will stem from escalating costs, unclear business value, and inadequate risk controls. "Most agentic AI projects right now are early stage experiments or proofs of concepts that are mostly driven by hype and are often misapplied," said Anushree Verma, Senior Director Analyst at Gartner. This hype, Verma explains, can blind organizations to the real cost and complexity of deploying AI agents at scale, ultimately stalling projects from moving into production. Companies need to make careful, strategic decisions about where and how they apply this emerging technology.
The report highlights that most agentic AI propositions currently lack significant value or return on investment, as existing models don't have the maturity and agency to autonomously achieve complex business goals or follow nuanced instructions over time. Many use cases positioned as agentic today don't actually require agentic implementations.
The market is further complicated by vendor misrepresentation. Many vendors are contributing to the hype through "agent washing" – the rebranding of existing products such as AI assistants, robotic process automation (RPA), and chatbots without substantial agentic capabilities. Gartner estimates only about 130 of the thousands of self-proclaimed agentic AI vendors are genuine.
A January 2025 Gartner poll of 3,412 webinar attendees revealed that 19% of organizations had made significant investments in agentic AI, 42% had made conservative investments, 8% no investments, with the remaining 31% taking a wait-and-see approach or uncertain about their strategy.
Despite these challenges, Gartner acknowledges that the trend toward agentic AI represents a significant advancement in AI capabilities and market opportunity. The firm predicts at least 15% of day-to-day work decisions will be made autonomously through agentic AI by 2028, up from 0% in 2024. Additionally, 33% of enterprise software applications will include agentic AI by 2028, up from less than 1% in 2024.
For organizations looking to succeed with agentic AI, Gartner recommends pursuing it only where it delivers clear value or ROI. Integrating agents into legacy systems can be technically complex, often disrupting workflows and requiring costly modifications. In many cases, rethinking workflows with agentic AI from the ground up is the ideal path to successful implementation.