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Most executives think they are behind on AI. They are not.

May 26, 2026 · 7 min read · Notes · Benjamin Rodriguez

Executive TL;DR

  • The feeling of being behind on AI is, for most operators, a perception problem wearing a strategy costume.
  • The companies that moved fastest in 2023 and 2024 are now writing down pilots, reopening vendor contracts, and finding they bought speed by giving up optionality.
  • The real 2026 exposure is not slowness. It is signing model, data, and vendor commitments while still running on borrowed urgency.
  • The honest measure of position is not pilots launched. It is operating outcomes changed.

The Shift

The first-mover window in enterprise AI has closed faster than the people selling urgency want to admit. Infrastructure is a commodity. Top-tier model quality has converged. The premium has shifted from speed-to-deploy to judgment about what to deploy, where, and under whose control.

The data is no longer ambiguous. 88% of organizations now use AI in at least one business function. But only 39% report any EBIT impact. Most of those say less than 5% of EBIT traces back to AI (McKinsey State of AI, 2025). MIT NANDA reviewed more than 300 enterprise deployments. It found roughly 95% of generative AI pilots delivered zero measurable P&L impact, against $30 to $40 billion in spend (MIT NANDA / Fortune, 2025). The activity is real. The yield is not.

The fastest movers are not pulling away. They are renegotiating contracts, retiring pilots, and absorbing write-downs. 42% of companies scrapped most of their AI initiatives in 2025, up from 17% the year before (S&P Global Market Intelligence, 2025). That is not the picture of advantage the urgency story promised.

Why It Matters Now

In 2026, companies sign the next round of infrastructure choices: which model, which data setup, which vendors. Executives who walk into that cycle already convinced they are behind will overpay, overcommit, and under-govern. Vendor pricing power depends entirely on the buyer believing that waiting costs more than locking in. On the current evidence, that belief is wrong for most companies.

The urgency narrative is now a pricing strategy, not a competitive reality.

What Most Companies Are Still Doing

The dominant pattern is pilot accumulation driven by visibility, not operating logic. Companies justify the spend against peer benchmarks, not against the P&L. The internal scoreboard tracks launches, not outcomes. 46% of executives running these programs still have no structured way to measure return (Wavestone, 2025). The scoreboard cannot tell them whether they are winning or losing.

Under the activity sits a governance gap. Deployment pace has outrun the ability to assess model risk, vendor dependency, and how much of the work now runs through a single system. This is not a competence problem. It is what happens when an organization reads deliberation as weakness. RAND found enterprise AI projects fail at roughly twice the rate of conventional IT. Most failures trace back to misaligned incentives and weak governance, not the technology (RAND Corporation, 2025). The pattern holds across industry and company size.

What the Best Operators Are Doing Instead

The operators pulling ahead are not moving faster. They are more selective, and their decisions compound instead of accumulate. BCG found that roughly 5% of companies generate substantial value at scale, while 60% generate no material value at all (BCG, 2025). The gap is not about who started first. It is about who is making decisions that survive the next round of pressure.

1. Ruthless triage of the pilot portfolio. The measure is not how many pilots launched. The measure is how many moved a real operating number. Pilots that cannot point to a moved metric inside two quarters are not promising. They are drag. The fastest way to free capital for what works is to stop funding what does not.

2. A vendor setup that preserves leverage. 76% of CEOs already say they are overly dependent on too few AI vendors. 67% have challenged a vendor or platform decision their CIO made in the past year (Dataiku / Harris Poll, 2026). The best operators are building in the ability to swap vendors now, while they still have leverage on price, rather than after a forced migration.

3. Governance built before deployment pressure peaks. Model risk review, records of where your data comes from, and human-review standards belong in place before the calendar gets crowded, not after the first incident. Governance built under pressure is governance built badly.

4. Resetting the internal narrative. The operators making the best calls have actively dismantled the race frame inside their own walls. They have given their teams permission to deliberate. That one change does more for decision quality than any tool selection.

Implications for the Next 12 Months

Portfolio Rationalization

Organizations that do not actively retire underperforming pilots in the next four quarters will carry a growing line of sunk-cost commitments into the next budget cycle. Each retained pilot gets harder to kill the longer it sits, because its sponsors accumulate. The window to cut cleanly is now, while the market itself is normalizing the act of cutting. Companies scrapped 46% of proofs-of-concept before they reached production in 2025 (S&P Global Market Intelligence, 2025). That is cover. Use it.

Vendor Concentration Risk

The vendor market is consolidating. Executives who have not mapped their dependency exposure will face forced migrations at the worst possible moment. That exposure is the set of workflows that would stop if a vendor changed terms, raised prices, or was acquired. Mid-deployment. Under-resourced. With no leverage left to renegotiate. The map is cheap to build today and expensive to need tomorrow.

The Internal Narrative

46% of senior executives still say they are worried their company is falling behind on AI agents specifically (PwC, 2025). But the broader sense of being behind dropped from 75% to 45% year over year (Wavestone, 2025). The anxiety is reshaping, not disappearing. The CEOs who reframe the timeline inside their own walls, from a race to a build, will keep the people capable of executing at the next level of complexity. The ones who keep selling the race will keep losing those people to the ones who stopped.

Executive Next Step

Audit the current pilot portfolio this quarter. Not for what has launched, demoed, or made a slide. For what has demonstrably moved an operating number the P&L can see. Treat that number as the only honest measure of position. Everything else is motion dressed as progress.

Sources

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