Academia
Despite record investment, investors, executives and corporate boards are growing increasingly skeptical that AI will deliver significant productivity gains anytime soon.
A man walks past signage for the World Artificial Intelligence Conference (WAIC) on July 16 in Shanghai, China. (AFP/Hector Retamal)
After years of soaring expectations, the artificial intelligence industry is approaching a moment of reckoning. Despite record investment, investors, executives and corporate boards are growing increasingly skeptical that AI will deliver significant productivity gains anytime soon.AI skepticism is driven by several factors. For starters, the cost of using large language models (LLMs) continues to climb, often with few measurable benefits. According to the Silicon Data Token Expenditure Index, LLM spending has doubled since 2025, even though the cost per token has fallen by more than 90 percent over the past three years.
In other words, AI usage has grown so rapidly that lower token prices have failed to reduce overall spending, leaving companies paying more than ever. Economy-wide, the Federal Reserve Bank of Atlanta estimates that firms will increase AI spending by 50 percent in 2026, to US$280 billion.
