Bain went looking at the companies that actually measure their AI savings and found four in ten had clawed back 10% or less. The tools worked. The money never showed up.
This is the sound of the bill arriving, and the whole market can hear it.
The recent AFR AI Summit was a chorus of the same anxiety. Tokens rationed like scarce credit. CFOs staring at line items that did not exist two years ago. Executives asking, as politely as they could, when the productivity they were sold is going to turn up.
The diagnosis everyone reached for was that Australia adopts fast and deploys badly. As Quantium’s Peter Tonagh observed, Australia is world-class at picking up the new tools, but ranks near the bottom when it comes to using them well. The problem isn’t technology. It’s that we haven’t reimagined how we work.
That is half the answer, and it faces the wrong way. We are, of course reimagining the work. It’s just we are reimagining it around ourselves. The most powerful tool in a generation is being aimed at our own processes and our own productivity, and now we are puzzled that the customer cannot feel a thing.
Nobody downloaded it
The clearest evidence sits in the code. As recently reported in the Financial Times, an MIT study followed software developers before and after they picked up agentic AI. They wrote almost 300 per cent more code. By the time that effort hardened into actual software releases, the gain had fallen to about 30 per cent.
The number of people who downloaded the resulting apps did not move at all. More was built, faster than ever, and the world wanted almost none of it.
The optimists have a fair reply. Productivity always lags a new technology, because the gains only arrive once organisations rebuild around it. Factories that bolted electric motors onto their old steam layouts saw very little. The boom came decades later, when they redesigned the floor around the motor. Give AI the same patience, the argument goes, and the value will come.
It will, but only for the firms that rebuild around the right thing.
The factories that won did not reorganise around the motor for its own sake. They reorganised around the work the motor let them put into the world. Spend the next three years restructuring around your own internal metrics and you will simply reach the same expensive disappointment a little later, having reimagined everything except the point.
The Summit crowd was right that this is a change problem before it is a technology one. Telstra has cut the time it takes to restore a fault by more than a fifth, and customers feel every minute of that. CBA’s Matt Comyn talks about AI making human judgement scarcer and more valuable, and spends tokens like capital, only where they earn it. Internal AI can serve a customer superbly. The test is simple: Would anyone outside the building notice if the work stopped.
That is the question almost nobody is asking. I spent last week in New York, where AI is advertised on the subway walls, on the buses, on hoardings the size of office towers. In nearly all of it, there is no customer in sight. The technology is the hero of its own commercial. The missing word in nearly all of it, and in most of the answers on that Summit stage: customer.
The same blind spot shows up in the deals.
I spent time last week with several go-to-market salespeople who had closed large enterprise AI contracts, only to watch them sit idle. Nobody building. Nobody using the thing they had signed for. My read is that the buying was the point.
A board caught in the fear of missing out leans on the executive to do something about AI, and a signed contract is something. Then the technology lands, nothing is done with it, and the problem compounds quietly until someone asks what the renewal is actually for.
The vendors have worked this out. It is why OpenAI, Anthropic and others are standing up teams of forward-deployed engineers and sending them inside their customers, to do the part the customer cannot, which is to work out how the tool might serve the people that customer exists to serve.
But there is a darker way to forget the customer, and Four Corners recently covered it:
In “The AI Race,” Steve Cannane gave airtime to Imran Ahmed of the Centre for Countering Digital Hate, who has spent two years cataloguing what happens when these systems are tuned to keep us engaged. A system optimised for time spent learns to meet a person at their lowest and keep them there, and the ones most easily kept there are children.
Ahmed’s researchers also found chatbots generating self-harm and suicide material for accounts they were told belonged to teenagers. Families are now in court over children who did not come back. Kids aren’t customers. Sadly, they’re the product.
None of it is a malfunction. It is what optimising for engagement looks like when nobody in the building has to answer for who the technology is for.
There is a version of all this that has nothing to do with money.
Walk into a mission-driven organisation, a charity or a community health service, and you meet people who rarely ask what AI will take from them. Their worry runs the other way. They want to know whether they will keep the funding and the capacity to deliver the thing they next need to deliver. The mission sits in full view, so the question already points outward: Can we reach more people, and serve them better?
Every company has the same kind of mission, whether it remembers it or not. It exists to serve a customer, and that is how it earns. Somewhere along the way a lot of them let productivity become the goal in its own right, a number that floated free of the people it was meant to serve.
The charities are simply harder to fool, because their funders ask the outward question for them every year. AI does not change why a company exists. It only raises the cost of having forgotten. And no algorithm can remind your people why they came to work in the first place. That job belongs to whoever is leading them, and it has never mattered more than now.
Two weeks ago Pope Leo XIV released his first encyclical. A first encyclical is where a pope sets the question his papacy will be measured against, and he chose artificial intelligence.
He called it Magnifica Humanitas, on safeguarding the human person, and timed it to the 135th anniversary of Rerum Novarum, the letter his namesake wrote in 1891 on the dignity of the worker in the age of the machine. Then he did the thing most popes leave to their cardinals. He stood up and presented it himself.
The oldest institution in the West has looked at this machine, as it once looked at the last one, and decided the question worth staking a Papacy on is the human being standing in the middle of it.
- Matt Vitale is executive director of New Dialogue, which empowers companies to unlock the full potential of their knowledge using artificial intelligence. Read more on the Open Dialogue blog.
