As companies continue to invest billions in AI, employees and shareholders are more frequently demanding to see tangible results. Yet, at the end of 2025, only 15% of executives reported that AI integrations increased profits. To understand how businesses will close the gap between AI enthusiasm and returns, look to a surprising place beyond the private sector: the Internal Revenue Service.
A government agency might not seem like a typical business, but it faces this same urgency to show progress with AI and challenges in achieving it. I felt this pressure every day when I led the IRS through one of its most ambitious modernization efforts in decades. In 2023, we began deploying AI in targeted ways to improve taxpayer service, compliance, and operational efficiency. From the beginning, accountability was absolute. Each dollar we spent came from taxpayers so every investment had to produce measurable improvements.
Our blueprint became to identify urgent pain points, practically apply AI, measure impact, and build from there. Private businesses can follow the same methodology, but only if they understand how to identify and compound wins from different forms of AI.
The Three Paths to Value
