42% of AI Initiatives Are Abandoned as Startups and Big Tech Shut Projects
Updated
Updated · TechCrunch · Oct 24
42% of AI Initiatives Are Abandoned as Startups and Big Tech Shut Projects
1 articles · Updated · TechCrunch · Oct 24
Summary
About 42% of AI initiatives are ultimately abandoned by their corporate parents, S&P Global Market Intelligence says, underscoring a widening "AI graveyard" of products that shut down, pivoted, or missed expectations.
Relay closed in August and Character.ai filed for bankruptcy after larger platforms folded similar AI features into their own products, highlighting how competition, weak demand, scaling problems, and funding strain are killing stand-alone tools.
OpenAI has also culled projects: it rolled back a July 9 ChatGPT redesign, discontinued ChatGPT Atlas on August 9, folded Operator and image tools into ChatGPT, and shut Sora in March 2026.
Apple and Microsoft show the pattern extends beyond startups—Apple delayed its upgraded Siri until iOS 27 beta after engineering issues, while Microsoft's Recall kept drawing privacy criticism even after a yearlong rethink.
Hardware and niche apps have fared no better: Humane raised $230 million before HP bought most assets for $116 million, while Huxe, Yupp, Figgs AI, and Notion Mail all failed to find durable product-market fit.