Is AI Ironically Killing Productivity?

Artificial intelligence is the new buzzword making rounds in investor circles and boardrooms. From large corporations to new age startups, everyone is in a rush to “adopt AI”. It paints the picture of being a magic wand that can enhance productivity multifold, reduce costs and make employees superhuman. It can perform mundane tasks allowing time for creativity and innovation. 

To prove the hype of this productivity revolution, let’s take a few examples. 

US venture capitalists have invested $161 billion in AI so far this year, which is around two-thirds of their total spending. Over the past 12 months, 10 loss-making artificial intelligence (AI) startups have seen their combined valuations soar to nearly $1 trillion.

The question naturally arises: is all this buzz around AI really true?

While management across industries is mandating the use of AI, only a few are seeing it add real value. According to a recent report by MIT Media Labs, 95% of the organisations reported no measurable return on their AI investments. It can reasonably be interpreted that the dream of a productivity revolution powered by AI remains largely elusive. 

The Expectation of AI: An unfulfilled promise

The excitement around AI adoption is only natural because of its amazing abilities. It can summarize documents, analyse data, generate marketing content and much more in just a matter of seconds. Companies expected this to free their employees from mundane repetitive tasks so that they could focus on creativity and innovation. 

However, it has resulted in a rather disappointing trend in workplaces i.e. AI-led inefficiency. 

The enthusiasm can be clearly seen in the sky high valuations and inflow of investments in the AI space. However, there is a paucity of encouraging outcomes. 

The gap in the expectation and the reality of AI led productivity is not because AI as a tool is completely ineffective. It is, in fact, due to ineffective use of technology in the workplace for a myriad of reasons. 

The Reality – Workslop

The new term used to describe this phenomena of AI led inefficiency in organisations is “Workslop”. Coined by researchers at MIT, Workslop refers to an epidemic of nonsensical AI generated work that masquerades as genuine work but has no actual value and does not meaningfully advance work. 

In a survey of 1,150 employees in the U.S., 40% reported receiving “Workslop” in the past month. It is a result of the copy-paste style of adopting AI. Instead of using AI to enhance their output, employees are simply producing AI generated work with no human effort or input. As a result the reader must sift through the work to find relevant material, edit or redo work entirely. This has shifted the burden of work from the writer to the reader. 

A shocking example of “Workslop” was seen last month where, Deloitte, a large and credible financial services company, delivered a report to the Australian government for $450,000. It was later found to be fully AI generated with no real value. The backlash was quick to follow. 

This example perfectly highlights the irony of “Workslop”. AI investments intended to enhance efficiency are instead leading to expensive inefficiency. 

The Hidden Cost

The hidden economic cost of this trend is enormous. In the same MIT survey, respondents said they had spent about two hours a day trying to redo or make sense of AI-generated “Workslop”. Based on their reported income levels, this results in an “invisible cost” of $186 per employee each month.  

So, for an organisation with 10,000 employees the cost amounts to $9 billion lost in productivity each year due to AI-led inefficiency. 

The irony is glaringly apparent. A tool, meant to be the driver of a productivity revolution, has now  created inefficiencies. Economists have coined this as productivity drag. 

Why is AI failing?

The data paints a vivid and apparent picture.Various studies show that over 95% of AI pilot projects fail to scale. Most never get past the experimental stage.  

There are a multitude of reasons for such a large number of failures. Some of them are as follows – 

  1. Absence of Strategy – Organisations today are in a hurry to “adopt AI” without a clear plan or strategy for its implementation. It leads to chaos and misdirected efforts which ultimately does not yield any benefits. 
  2. Workflow Misfit – There are many inefficiencies when AI is forced into pre-existing workflows that are not designed to leverage the strengths of AI optimally.
  3. Employee Opposition or Overuse – Due to the lack of adequate training and AI literacy, employees end up either distrusting AI or overusing it leading to the phenomena of “Workslop”. 

These are just some of the reasons so to state. As a result, many AI pilots that begin with vigour and enthusiasm end up abandoned midway.

Is AI all bad?

No, not at all. AI isn’t the villain of this story- misuse of AI in the workplace is. When implemented correctly, AI can actually enhance human abilities. For example, A Stanford study found that use of AI agents by customer support agents improved their response speed by 14%. It also increased customer satisfaction. 

The point addressed here is that AI can augment productivity when humans are at the center of its use and in control of the technology. Using AI blindly leads to inefficiency; using it thoughtfully and correctly leads to the productivity revolution that AI once promised.

The Solution: Designing Workflows That Work With AI

The burning question that remains is how organisations can realistically tap the value that AI has to offer and avoid “Workslop”. The MIT study proposes a framework called the NANDA system for transparency and critical thinking in AI adoption. These are values often missing in the adoption of AI in organisations. NANDA can be explained as follows:

  1. Necessary: Is it necessary to use AI for this task? Or can a human being do it more efficiently and effectively?
  2. Accountable: Who will be held accountable for this AI generated work?
  3. Non–Delegable: Are we handing off a task that requires human judgement?
  4. Design–Aligned: Is the workflow suitable for AI adoption or are we force-fitting it into place
  5. Adaptive: Are we adjusting AI systems as AI evolves and changes?

Another aspect that organisations should focus on is transparency in the use of AI. Companies like Microsoft are adopting “AI Transparency Charters”. They clearly state the role of AI tools, data usage policies and accountability measures.

Training is another vital factor. AI literacy before mandating the use of AI in organisations seems logical but is missing in most organisations. This can be done through AI training programs. This will make AI a tool for productivity; not a crutch. 

Conclusion

It would be no exaggeration to state that AI is the most revolutionary technology of our time. The path it is on today goes to show that technology alone can’t enhance productivity. The way forward is to move from “Workslop” to worksmart. 

Humans must be at the epicenter of AI adoption; otherwise, it will fail to fulfill its promise. It will become just a source of noise in markets and boardrooms and fade into oblivion. 

Actionable change and a productivity revolution will come when humans are empowered by AI not replaced. The future lies not in Artificial Intelligence but Augmented Intelligence which is a confluence of human thought and machine precision. 

References

          Kahn, J., Hinchliffe, E., Brady, D., Estrada, S., Garfinkle, A., Nusca, A., Nolan, B., Lichtenberg, N., Smith, D., Burleigh, E., Royle, O. R., & Fore, P. (2025, August 21). An MIT report finding 95% of AI pilots fail spooked investors. It should have spooked C-suite execs instead. Fortune. Retrieved October 25, 2025, from https://fortune.com/2025/08/21/an-mit-report-that-95-of-ai-pilots-fail-spooked-investors-but-the-reason-why-those-pilots-failed-is-what-should-make-the-c-suite-anxious/

          Liu, J. (2025, September 29). AI-generated “workslop” is here. It’s killing teamwork and causing a multimillion dollar productivity problem, researchers say. CNBC. https://www.cnbc.com/2025/09/23/ai-generated-workslop-is-destroying-productivity-and-teams-researchers-say.html

           AI-Generated “Workslop” Is Destroying Productivity. (2025, September 25). Harvard Business Review. https://hbr.org/2025/09/ai-generated-workslop-is-destroying-productivity?ab=HP-latest-text-5

           Morrow Allison. (2025, September 26). AI isn’t replacing your job, but ‘workslop’ may be taking it over. CNN. Retrieved October 9, 2025, from https://edition.cnn.com/2025/09/26/business/ai-workslop-nightcap