--- title: "AI Hype Is Dropping Off a Cliff While Costs Soar, Experts Warn" description: "Blowing Bubbles As Large Language Models race to the moon and artificially-generated slop art populates government websites, AI spending is ballooning to epic proportions — and the bubble may be close to bursting. That's according to a recent analysis by Gartner — the Connecticut-based research firm famous for the Gartner hype cycle — which posits that worldwide IT spending is expected to total over $5.5 trillion in 2025, an increase of 9.8% from 2024. IT sectors such as data centers, devices, and software \"will see double-digit growth in 2025, largely due to generative AI hardware upgrades,\" the report reads. Despite […]" date: "2025-01-23" modified: "2025-01-23" authors: - name: "Joe Wilkins" job_title: "Correspondent" link: "https://futurism.com/authors/jwilkins" url: "https://futurism.com/the-byte/ai-hype-cliff-costs" categories: - "Artificial Intelligence" tags: - "ai" - "hype" - "investments" - "the digest" --- # AI Hype Is Dropping Off a Cliff While Costs Soar, Experts Warn ![A robotic claw picks up a dangling business person by the foot, while a crumpled dollar bill fills in the background.]() *\Image: Getty / Futurism\* ## Blowing Bubbles As [large language models race to the Moon]() and [AI-generated slop art]() pollutes government websites, AI spending is ballooning to epic proportions — and the bubble may be [close to bursting](). That's according to a [recent analysis]() by Gartner — the Connecticut-based research firm famous for the [Gartner hype cycle]() — which posits that worldwide IT spending is expected to total over $5.5 trillion in 2025, an increase of 9.8 percent from 2024. IT sectors such as data centers, devices, and software "will see double-digit growth in 2025, largely due to generative AI hardware upgrades," the report reads. However, despite this unfathomable increase in spending, these segments are not ready to "differentiate themselves in terms of functionality yet, even with new hardware." That actual functionality is of course key to selling AI-as-a-product going forward, because sooner or later, stakeholders, clients, and governments are going to start demanding real, tangible benefits for their [forest-melting]() efforts. Referencing the hype cycle, Gartner research VP John-David Lovelock, said in a [statement]() that "GenAI is sliding toward the trough of disillusionment, which reflects \[Chief Information Officers'\] declining expectations for GenAI, but not their spending on this technology." In short, AI companies are shelling out more and more to develop GenAI despite [growing market skepticism]() of the tech's use cases. If true, AI is entering a troubling chunk of its lifecycle, where returns slow and investor (not to mention user) expectations drop. "Our expectations for what generative AI can and will do are starting to come down," Lovelock [told *The Register*](). "We won't make it to the trough until 2026, but 2025 is going to be a year of the slide." ## Burning Barrels This forecast brings into question the logic underlying the incredible [economic](), [environmental](), and [human]() costs of AI development. Though we in the US are no strangers to discarding social wellbeing for profit — take the [commercialization of insulin](), for just one of thousands of examples — we have grown [less experienced]() since the heights of the space race at moving mountains where profit is not explicitly guaranteed. When, for all their advancements, all these half-baked AI rollouts can offer are "[leaked photos of heaven]()", it needs to be asked: who are these advances for? If AI developers are incapable of producing [socially compelling use cases]() for their models, then burning through trillions of dollars in a never ending AI race isn't anymore practical than a [one-way trip to Mars](). **More on practical AI:** [*Pentagon Official Boasts That AI Is Helping The Military Kill People Faster Than Ever Before*]() ## Author At Futurism, I focus on the intersection of technology and power — examining the economics, history, and politics behind today’s dystopian headlines. As a writer, I’m interested in topics ranging from AI’s impact on labor to startups nobody asked for. My prior work includes bylines in Jacobin, Verso, and Blue Labyrinths. My work for Futurism has been cited by publications including Forbes, The Guardian, MIT Technology Review, Time, The Nation, Mother Jones, The Verge, and Wired. I grew up in Michigan, attending Central Michigan University as well as Ball State University, where I earned a master of music. I now live in Brooklyn with my girlfriend and our cat Ziti. On weekends, you can find me hunched over a cold pint arguing geopolitics with the other transplants. ### Author social links [Bluesky]()