(Reuters) -More than 40% of agentic artificial intelligence projects will be canceled by the end of 2027 due to escalating costs and unclear business value, according to a report by Gartner.

WHY IT'S IMPORTANT

Tech giants such as Salesforce and Oracle have embraced AI agents, systems that can autonomously complete goals and take action, pouring billions into the technology in the hopes of boosting margins and optimizing costs.

Many vendors are engaging in "agent washing" - the rebranding of products such as AI assistants and chatbots without significant agentic capabilities, Gartner says, estimating that only about 130 of the thousands of agentic AI vendors are real.

KEY QUOTES

"Most agentic AI projects right now are early stage experiments or proofs of concept that are mostly driven by hype and are often misapplied," said Anushree Verma, Senior Director Analyst at Gartner.

"Most agentic AI propositions lack significant value or return on investment, as current models do not have the maturity and agency to autonomously achieve complex business goals or follow nuanced instructions over time," Verma said.

BY THE NUMBERS

Gartner 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.

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Arun Koyyur)