More than 40% of agentic AI projects will be canceled by the end of 2027 on account of rising costs, unclear business value or inadequate risk controls, a Gartner report said.

The report underlines that agentic AI is still at a nascent stage despite large businesses pouring billions into the technology and funding in agentic AI startups gaining ground.

“Most agentic AI projects right now are early stage experiments or proof of concepts that are mostly driven by hype and are often misapplied,” noted Anushree Verma, senior director analyst, Gartner. 

The report stated that many vendors are contributing to the hype around agentic AI by engaging in “agent washing”, meaning the rebranding of existing products, such as AI assistants, robotic process automation (RPA) and chatbots, without substantial agentic capabilities. 

Only about 130 of the thousands of agentic AI vendors are real, as per Gartner's estimates.

Gartner's Verma further highlighted that most agentic AI propositions lack significant value or return on investment (ROI), as current models don’t have the maturity and agency to autonomously achieve complex goals. “Many use cases positioned as agentic today don’t require agentic implementations," added Verma.

However, the report stressed that agentic AI represents a progress in AI capabilities despite the challenges. It noted that at least 15% of day-to-day work decisions will be made autonomously through agentic AI by 2028, up from 0% in 2024. Besides, 33% of enterprise software applications will include agentic AI by 2028, up from less than 1% in 2024.

In an earlier report, Gartner had said that over 60% of enterprise-level AI applications will feature agentic capabilities by 2026, up from less than 10% in 2023. 

Global tech giants have been investing in agentic AI capabilities in the past years. Just earlier this month, Amazon launched a new R&D group focused on agentic AI and robotics.

Besides, agentic AI startups have also been getting early stage and growth stage venture capital funding.

Earlier this  month, Pactum announced Series C funding of $54 million led by Insight Partners. Last month, Silicon Valley-based Adopt AI closed seed funding of $6 million led by Elevation Capital.