YPO Technology Network AI Brief

The AI Grifter Test — Five Red Flags Before You Sign That Proposal

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95% of enterprise generative AI pilots deliver zero measurable return. The average large enterprise abandoned 2.3 AI initiatives last year, with $7.2M in average sunk cost per abandoned project. Those numbers come from MIT Project NANDA and S&P Global. They are not paranoia. They are the data.

This is an opinion episode. Stephen Forte names what he is seeing in the field directly: the AI transformation market has a grifter problem. Not all of it. Not even most of it. But enough that every CEO needs a framework before they sign the next proposal that lands in their inbox.

Five red flags every CEO should be able to spot inside a week:

  1. They closed you in one or two meetings. Workflow transformation requires process mapping, not a discovery call.
  2. They are proposing to build you something proprietary. MIT data: internal builds fail at twice the rate of vendor-led, platform-based solutions.
  3. The deliverable is murky and the technology is opaque. If you cannot see how you would leave their platform — assume that is intentional. Gartner: 40% of agentic AI projects will be discontinued by 2027.
  4. They want significant payment up front. Serious vendors stage payments against verifiable deliverables.
  5. The proposal has no real data work line item. Industry consensus: data preparation is 70-80% of any real AI project. If it is not in the budget, it is not a serious program.

    6. Plus: the Klarna pivot moment — what happens when even the best-run, most-platform-native enterprise AI deployment has to walk it back. And three things every CEO should do this week before signing the next proposal.

    The most strategic AI decision you make this year may be the one you do not sign.

    The AI Brief is produced for YPO Technology Network members. New episodes every weekday at 6 AM ET.

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    YPO Technology Network AI BriefBy Stephen Forte