Forrester: We’ve Entered the Age of Frumpy, Functional AI
▼ Summary
– AI hype is waning as the technology transitions from a sensational trend to becoming more ordinary and functional in daily life.
– Businesses are shifting focus from rapid AI adoption to governance, with 60% of Fortune 500 companies expected to appoint a head of AI governance by next year.
– AI spending is slowing as companies delay initiatives due to unmet ROI expectations, with one-quarter predicted to postpone spending in 2026.
– Employee upskilling is becoming a priority, with 30% of large businesses planning to require training on internal AI tools for their workers.
– AI is automating data roles and leading to “agentic data and analytics,” while businesses are building integrated AI agent networks to reduce vendor reliance.
The initial wave of artificial intelligence excitement is subsiding as organizations transition toward practical implementation and governance, according to new analysis from Forrester Research. The market research firm indicates we’re entering what it terms “the age of frumpy but functional AI,” where flashy promises give way to dependable utility.
This evolution mirrors the trajectory of other transformative technologies. Much like the iPhone transitioned from revolutionary device to everyday essential, AI is becoming embedded in our operational infrastructure rather than remaining at the forefront of attention. The technology isn’t disappearing, it’s simply maturing into a standard business tool.
Several emerging trends support this shift in perspective. Forrester anticipates that throughout 2026, approximately one-quarter of companies will postpone AI spending initiatives after recognizing that many implementations fail to deliver expected returns on investment. The gap between vendor promises and actual business value is prompting this market adjustment, with a recent MIT study revealing that 95% of enterprise AI applications haven’t produced measurable benefits.
Concurrently, organizational priorities are shifting from rapid adoption to responsible management. Governance, what Forrester humorously calls “the frumpiest word in the business lexicon”, is becoming a central concern for leadership teams. The firm projects that 60% of Fortune 500 companies will establish dedicated AI governance roles by next year, following similar appointments at organizations like Sony and Bank of America.
Employee development represents another key focus area. Approximately 30% of large enterprises are expected to implement mandatory training programs teaching workers how to effectively utilize internal AI tools. This upskilling initiative coincides with slowing hiring for traditional data roles, engineers, scientists, and analysts, as AI agents automate significant portions of these positions.
The research also highlights growing concerns about vendor fragmentation, where overreliance on multiple third-party providers creates operational complexity. In response, more organizations are developing what Forrester calls “agentlakes”, integrated networks of interoperable AI agents that function cohesively across business units.
While artificial intelligence continues to influence Wall Street, media coverage, and international relations, the technology’s maturation signals a move toward steadier, more measured integration. The era of breathless hype appears to be giving way to a period of pragmatic application, where AI’s true value will be determined not by sensational claims but by its consistent performance in solving real-world business challenges.
(Source: ZDNET)
