Gartner published a forecast on May 28, 2026, stating that most generative AI and custom model projects will be a bust,...

Gartner published a forecast on May 28, 2026, stating that most generative AI and custom model projects will be a bust, advising enterprises to look to China for success. The report, covered by The Register, suggests that the current wave of AI investment may not yield expected returns, which could temper demand for cloud AI services and underlying hardware. For Microsoft, which is heavily invested in Azure AI and OpenAI, this forecast implies a potential slowdown in enterprise adoption of AI workloads, reducing demand for GPU clusters and cloud infrastructure. The bear case is that enterprises may scale back AI experiments, lowering revenue growth for Microsoft's AI segment and capex for data centers. While the forecast is speculative, it aligns with other signals of AI project failures. This could also affect hyperscalers like Amazon (AWS) and Google (GCP), as well as chip suppliers Nvidia, AMD, and foundry TSMC, if demand for AI chips decelerates. Source: The Register article.