AI industry faces rising startup failures despite high investment

The artificial intelligence sector is seeing an increasing number of product and startup failures due to intense competition, high operational costs, and technical barriers. According to S&P Global, approximately 42% of AI initiatives developed by businesses are eventually abandoned due to factors such as lack of capital, difficulty in scaling, or failure to attract sufficient users.

Notable failures include the automation tool Relay, which ceased operations in August 2026 after five years of development as major platforms like OpenAI and Google integrated similar features. Other significant setbacks include the Humane AI Pin, which faced performance issues and battery safety warnings before its assets were acquired by HP, and the Rabbit R1 device.

In contrast to these global market struggles, the Vietnamese ICT sector shows strong AI integration. At the Sao Khue 2024 awards organized by VINASA, over 90% of the winning products and services featured integrated AI applications to support businesses and citizens.