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August 25, 2025 9 mins

In under ten minutes, I unpack MIT’s 95% no returns on GenAI headline, where ROI is actually showing up, and how GPT‑5 pricing is reshaping enterprise procurement. Plus rapid updates on Oracle, Microsoft and Google moves, and practical tools you can deploy this week.

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Episode Transcript

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(00:00):
Hi everyone.

(00:00):
I'm Andy, and this is the AI Breakdown.
Welcome to your weekly news edition where I'll cover what happened in AI last week, why it matters all in less than 10 minutes. 4 00:00:11,550.464413283 --> 00:00:14,190.464413283 First up, let's talk r oi reality. 5 00:00:14,430.464413283 --> 00:00:24,510.464413283 MIT just released a bombshell study where they analyzed 300 AI deployments, interviewed 150 business leaders and surveyed 350 employees. 6 00:00:25,35.464413283 --> 00:00:35,145.464413283 The headline, despite a staggering 30 to $40 billion investment in generative ai, 95% of organizations haven't seen a penny of measurable return. 7 00:00:35,625.464413283 --> 00:00:39,15.464413283 Only 5% of pilots actually delivered rapid revenue growth. 8 00:00:39,585.464413283 --> 00:00:43,575.464413283 What's going wrong? MIT points to a fundamental learning gap. 9 00:00:43,905.464413283 --> 00:00:50,715.464413283 These generic AI tools might work brilliantly for individuals, but they're failing to adapt to complex organizational workflows. 10 00:00:51,585.464413283 --> 00:00:53,175.464413283 The numbers tell an interesting story. 11 00:00:53,415.464413283 --> 00:00:59,955.464413283 67% success when buying from specialized vendors versus just 33% for internal builds. 12 00:01:00,585.464413283 --> 00:01:01,365.464413283 And here's the kicker. 13 00:01:01,905.464413283 --> 00:01:05,385.464413283 More than half of Gen AI budgets are flowing into sales and marketing. 14 00:01:05,775.464413283 --> 00:01:10,605.464413283 While the real ROI Gold mine is hiding in back office process optimization. 15 00:01:11,250.464413283 --> 00:01:14,490.464413283 Both Fortune and Axios have been covering this extensively. 16 00:01:14,820.464413283 --> 00:01:16,830.464413283 The market certainly took notice. 17 00:01:16,980.464413283 --> 00:01:20,790.464413283 Tech stocks tumbled Nvidia dropping about 3.5%. 18 00:01:21,270.464413283 --> 00:01:26,730.464413283 Palantir plunging 9%, and the social media conversation turned decidedly skeptical. 19 00:01:27,450.464413283 --> 00:01:34,590.464413283 Steve Sosnick at Interactive Brokers didn't mince words saying Maybe all this money is not actually being spent all that wisely. 20 00:01:35,10.464413283 --> 00:01:37,440.464413283 But MIT contributor, aia. 21 00:01:38,235.464413283 --> 00:01:39,735.464413283 Offers a more nuanced view. 22 00:01:40,185.46441328 --> 00:01:46,665.46441328 The winners of those who laser focus on one pain point execute with precision and partner strategically. 23 00:01:47,175.46441328 --> 00:01:48,555.46441328 That's where my heads are too. 24 00:01:49,655.12034472 --> 00:01:51,455.12034472 Now it's not all doom and gloom. 25 00:01:51,605.12034472 --> 00:01:53,705.12034472 There are genuine success stories emerging. 26 00:01:54,95.12034472 --> 00:02:01,475.12034472 Flash doc co reported an impressive 366% ROI with payback in under 10 months using Azure AI Foundry. 27 00:02:02,705.12034472 --> 00:02:10,85.12034472 They've boosted efficiency by 30%, slashed fraud by 10%, and improved data accuracy by 37%. 28 00:02:10,565.12034472 --> 00:02:16,985.12034472 Meanwhile, Toshiba claims Microsoft 365 copilot is saving each employee 5.6 29 00:02:16,985.12034472 --> 00:02:20,75.12034472 hours every month across their 10,000 strong workforce. 30 00:02:20,525.12034472 --> 00:02:26,45.12034472 See the pattern, targeted processes, mature vendors, and crystal clear measurement. 31 00:02:27,260.8698036 --> 00:02:29,750.8698036 Now let's talk adoption and pricing. 32 00:02:30,140.8698036 --> 00:02:38,240.8698036 Menlo Venture's midyear report reveals Enterprise LLM usage has skyrocketed by nearly 150% since 2024. 33 00:02:38,630.8698036 --> 00:02:42,260.8698036 Yet interestingly, new infrastructure spending is tapering off. 34 00:02:42,680.8698036 --> 00:02:48,260.8698036 What does this mean? Perhaps we're witnessing a fundamental shift from build to optimize. 35 00:02:48,740.8698036 --> 00:02:51,395.8698036 Companies are now squeezing more value from existing assets. 36 00:02:52,160.8698036 --> 00:03:01,280.8698036 Doubling down on domain specific applications and increasingly turning to open source models in production for both cost savings and customization flexibility. 37 00:03:01,820.8698036 --> 00:03:08,0.8698036 I'm also seeing clear signs of market consolidation and a growing weariness with massive infrastructure investments. 38 00:03:08,570.8698036 --> 00:03:10,10.8698036 And then there's the price war. 39 00:03:10,310.8698036 --> 00:03:11,120.8698036 Open AI's. 40 00:03:11,120.8698036 --> 00:03:21,20.8698036 GPT five has slashed prices so aggressively that VentureBeat analysis shows Claude Opus four now costs roughly seven times more per million tokens. 41 00:03:21,440.8698036 --> 00:03:28,880.8698036 For comparable tasks, this puts enormous pressure on Anthropic, whose revenue largely flows from cursor and GitHub. 42 00:03:28,880.8698036 --> 00:03:40,640.8698036 Copilot partnerships representing a roughly $5 billion annual run rate, while Anthropic still commands about 42% of the code generation market compared to open AI's 21%. 43 00:03:41,60.8698036 --> 00:03:45,680.8698036 This pricing strategy threatens their premium position as one industry analyst. 44 00:03:45,680.8698036 --> 00:03:49,910.8698036 So aptly put it, the pricing disparity signals a fundamental shift. 45 00:03:50,255.8698036 --> 00:03:56,645.8698036 Forcing enterprise procurement teams to reconsider vendor relationships built on performance rather than price. 46 00:03:57,95.8698036 --> 00:04:06,845.8698036 What's the bottom line here? Procurement leaders are absolutely delighted by these lower unit costs while investors are asking tough questions about vendor sustainability. 47 00:04:08,219.6660262 --> 00:04:10,319.6660262 Now let's talk platform power plays. 48 00:04:10,679.6660262 --> 00:04:12,629.6660262 Oracle made a massive move last week. 49 00:04:12,869.6660262 --> 00:04:16,464.6660262 Embed an open AI's GPT five across its entire ecosystem. 50 00:04:17,204.6660262 --> 00:04:24,944.6660262 Imagine having GPT five baked right into your Oracle databases and applications like Fusion Cloud, NetSuite, or Oracle Health. 51 00:04:25,364.6660262 --> 00:04:37,274.6660262 What does this mean for you? Think drafting content within apps, getting instant summaries of support threads and querying databases in plain English instead of complex S-Q-L-I-E techie database speak. 52 00:04:37,724.6660262 --> 00:04:44,564.6660262 That database 23 AI now includes vector search letting GPT five securely tap into your enterprise data. 53 00:04:45,209.6660262 --> 00:04:55,289.6660262 The partnership runs Deep OpenAI actually trains on Oracle Cloud Infrastructure Industry Analyst, Holger Mueller called this Three Ways with OpenAI to create Value. 54 00:04:55,649.6660262 --> 00:05:03,449.6660262 While Oracle VP Chris Rice promised the combination would unlock breakthrough insights and even generative AI directly from SQL. 55 00:05:03,989.6660262 --> 00:05:06,29.6660262 Microsoft hasn't been sitting idle either. 56 00:05:06,359.6660262 --> 00:05:09,784.6660262 They've rolled out some seriously enterprise focused copilot updates. 57 00:05:10,499.6660262 --> 00:05:13,799.6660262 You'll now get deeper group analytics that dive one level below. 58 00:05:13,859.6660262 --> 00:05:23,369.6660262 Direct reports automated agent governance, where embedded knowledge inherits sensitivity labels, and broader model support for those custom gpt you've been building. 59 00:05:23,909.6660262 --> 00:05:31,454.6660262 They've also introduced agent pre-approval with unified admin controls and boosted document indexing capacity to about 1.8 60 00:05:31,454.6660262 --> 00:05:32,699.6660262 million characters. 61 00:05:33,89.6660262 --> 00:05:35,279.6660262 That's roughly a thousand pages of content. 62 00:05:35,654.6660262 --> 00:05:40,484.6660262 The bottom line, better governance, more visibility, and significantly greater scale. 63 00:05:41,144.6660262 --> 00:05:47,384.6660262 Meanwhile, Google Cloud and NTD Data announced a global initiative focused on Ag agentic ai. 64 00:05:47,819.6660262 --> 00:05:52,199.6660262 They're developing industry specific solutions through agent Space and Gemini. 65 00:05:52,589.6660262 --> 00:06:02,999.6660262 Launching a dedicated business group with plans to certify 5,000 engineers and offering sovereign deployment options via Google distributed cloud in a separate but related move. 66 00:06:03,329.6660262 --> 00:06:09,779.6660262 Meta reportedly signed a massive $10 billion six year deal with Google Cloud, specifically for AI infrastructure. 67 00:06:10,649.6660262 --> 00:06:20,129.6660262 As NTT data's, Marv Mowar put it, their collective goal is accelerating AI powered cloud adoption globally, and they're clearly putting serious resources behind it. 68 00:06:21,565.17477586 --> 00:06:25,345.17477586 Now, time to look at some tools that you can add to your AI toolkit right away. 69 00:06:25,975.17477586 --> 00:06:37,165.17477586 Adobe just launched Acrobat Studio, a powerful PDF hub, where you can gather up to 100 documents, PDFs, office files, web pages into what they call PDF spaces. 70 00:06:37,960.17477586 --> 00:06:44,950.17477586 The built-in AI assistant answers your questions with clickable citations, so you always know where the information came from. 71 00:06:45,580.17477586 --> 00:06:58,90.17477586 They've integrated Firefly for text to image and video creation, added role-based assistance, and connected it to Adobe Express so you can transform insights into presentations or visuals on the fly. 72 00:06:58,750.17477586 --> 00:07:04,420.17477586 It's priced at $29 and 95 cents monthly for businesses with the eye features. 73 00:07:04,420.17477586 --> 00:07:06,430.17477586 Free to try until the 1st of September. 74 00:07:07,60.17477586 --> 00:07:13,570.17477586 Worth noting that Dan Ives at Wedbush has warned Adobe risks falling behind if they don't accelerate their innovation. 75 00:07:14,260.17477586 --> 00:07:27,490.17477586 Elation has introduced chat with your data, a conversational analytics tool that understands your metadata context, and they're claiming it will boost accuracy by up to 60% compared to standard large language models. 76 00:07:27,970.17477586 --> 00:07:33,370.17477586 It explains its reasoning, respects your permission settings, and you won't need to write a line of SQL. 77 00:07:34,300.17477586 --> 00:07:56,860.17477586 And finally, there's nano banana ai, a mysterious new image editing tool that recently emerged, which has taken the creative and tech industries by storm debuting Without traditional fanfare on blind testing platforms like LM Marina, the model instantly captured attention by outperforming established AI image editors in both speed and quality. 78 00:07:57,550.17477586 --> 00:08:03,160.17477586 Its natural language interface allows even non-professional users to make sophisticated edits. 79 00:08:03,505.17477586 --> 00:08:08,635.17477586 Such as change in backgrounds or artistic styles, just by describing them in plain English. 80 00:08:09,295.17477586 --> 00:08:20,275.17477586 Rumors are swirling about Google's involvement with cryptic banana emoji posts from company executives fueling speculation and excitement across social media and industry forums. 81 00:08:20,875.17477586 --> 00:08:25,285.17477586 This breakthrough has serious implications for businesses and creators alike. 82 00:08:25,615.17477586 --> 00:08:31,855.17477586 Nano banana AI's, democratization of high quality image editing promises major productivity. 83 00:08:32,215.17477586 --> 00:08:36,865.17477586 Boosts and potential cost reductions for marketing, e-commerce and creative teams. 84 00:08:37,255.17477586 --> 00:08:45,775.17477586 Traditional players like Adobe now face unprecedented competition as the scale and accessibility of AI powered content creation expands. 85 00:08:46,405.17477586 --> 00:08:52,855.17477586 Industry sentiment is overwhelmingly positive with early users referring to the model as genuinely mind blowing. 86 00:08:53,275.17477586 --> 00:08:59,375.17477586 While enterprises are watching closely to gauge its long-term impact on workflows and software licensing costs. 87 00:09:01,28.24198017 --> 00:09:10,718.24198017 So what's the big picture here? We're seeing an AI landscape full of contradictions on one side, incredible technical breakthroughs and fierce price wars. 88 00:09:11,198.24198017 --> 00:09:15,68.24198017 On the other real struggles with implementation and spotty ROI. 89 00:09:15,638.24198017 --> 00:09:18,458.24198017 Success isn't about which shiny AI tool you pick. 90 00:09:18,818.24198017 --> 00:09:20,168.24198017 It's all about your strategy. 91 00:09:20,618.24198017 --> 00:09:25,718.24198017 The winners are focused, disciplined, and crystal clear about the business problems they're actually solving. 92 00:09:26,378.24198017 --> 00:09:28,358.24198017 That's all for this week's AI roundup. 93 00:09:28,658.24198017 --> 00:09:29,993.24198017 If you found value in this breakdown. 94 00:09:30,623.24198017 --> 00:09:32,633.24198017 Please leave a rating and hit subscribe. 95 00:09:32,663.24198017 --> 00:09:33,653.24198017 See you next week.
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