Bursting The AI Bubble Might Be the Best Thing That Happens to High-Tech Leaders
Launching the new Alvarez & Marsal + Lucidworks Agentic AI Readiness Outlook for Software, Semiconductors & Cybersecurity
For the last two years, the AI market has grown at a pace that even the semiconductor industry would call “aggressive.” Budgets exploded. Roadmaps ballooned. Boards demanded “agentic AI” before many teams had mastered basic automation.
And now? Many business leaders have the same sinking feeling: Did we just live through an AI bubble?
According to MIT research, 95% of generative AI projects have failed to deliver measurable ROI—despite $30–40B in enterprise investment. That’s not a red flag; that’s the whole semaphore line on fire.
But here’s the twist: The bubble isn’t bursting because the technology is flawed. It’s bursting because the foundations weren’t built for it.
Today, Lucidworks and Alvarez & Marsal (A&M) are releasing a new, ungated joint paper that cuts through the hype and provides real data, real benchmarks, and a clear model for agentic AI readiness across software, semiconductor, and cybersecurity sectors.
👉 Download the Ungated Paper: Agentic AI Readiness — The Stories Companies Tell vs. What They Actually Build
Leaders Are Asking the Wrong AI Questions
Too many teams are still asking: “Which AI features should we adopt?”
But high-tech customers—developers, CISOs, chip designers—expect more than features. They expect precision, speed, trust, and flawless execution. And they can immediately detect when an AI-powered experience was bolted on rather than built on a strong foundation.
The paper reveals several industry-wide problems:
1. Companies are drastically overestimating their AI readiness.
Only 35% meet the minimum foundational requirements for s쳮ding with agentic AI.
2. Software and cybersecurity companies are skipping the basics.
They’ve implemented 65% of the foundational digital experience essentials, but only 39% of the necessary agentic AI capabilities—a misalignment the paper explicitly calls out.
3. Anxiety about AI is skyrocketing.
Concerns about response accuracy have grown 8x, deployment costs 18x, and data security 3x since 2023.
An A&M cyber expert says, “The rising prominence of AI has essentially converted adoption into an arms race, with many enterprises classifying automation as Agentic AI just to avoid being considered as lagging edge; AI automation should be use case-led and contextually relevant to detect and deter the evolving threat environment.”
4. Many companies are “AI washing.”
Teams are rebranding basic automation as “AI agents” to avoid looking behind, especially prevalent in cybersecurity and enterprise software.
So Is This Really an AI Bubble?
Short answer: Yes. But not for the reason you think.
The bubble isn’t about inflated valuations. It’s not about customer fatigue. It’s not even about hallucinations.
The bubble is this: Companies tried to build F1-class AI on a go-kart engine. As Lucidworks CEO Mike Sinoway notes in the paper, “Trying to build cutting-edge applications atop weak foundations is like building an F1 car on a go-kart engine—you simply won’t get results.”
The solution isn’t “more AI.” The solution is foundational readiness.
Three-Pillar Framework
The paper breaks readiness into three strategic pillars:
1. Data Foundations
Before any agent can “reason,” “validate,” or “act,” organizations must have:
- Clean, unified data pipelines
- Enterprise-grade governance
- Security frameworks that work across systems
- Scalable infrastructure for unpredictable workloads
In cybersecurity, this includes secure identity management, DLP, attack-chain detection, and unstructured-data protection—all documented in the paper’s domain-specific guidance.
2. Capabilities
Teams must distinguish:
- Automation vs. true AI reasoning
- Simple flows vs. agentic orchestration
- Assists vs. autonomous intervention
This is the leap most high-tech firms think they’ve made—but haven’t.
3. Execution
The paper shows that companies fail not because AI “doesn’t work,” but because they can’t embed it into operations or workflows.
Execution requires:
- ROI discipline
- Cross-functional alignment
- Partner ecosystems prepared for agentic architectures
- Talent and adoption strategies that scale
What This Means Specifically for Each Sector
Cybersecurity
Cybersecurity SOCs handle 10,000+ alerts per day and require instantaneous precision. Agentic AI shifts them from reactive to autonomous defensive systems capable of detecting, assessing, and responding in real time.
Meanwhile, talent shortages (~4.8M unfilled roles) and a rapidly expanding attack surface make automation no longer optional but inevitable.
Semiconductors
Data fragmentation across R&D, fab operations, supply chain, and equipment logs makes semiconductors ideal for enterprise search + agentic AI. Use cases highlighted in the paper include:
- Autonomous chip-design iteration
- Lithography anomaly detection
- Predictive defect management
- Proactive supply chain intelligence
But all require a unified data infrastructure and governance before they can s쳮d.
Software Platforms
Software companies face the credibility risk of AI hallucinations and subpar digital experiences. With only 39% of agentic capabilities implemented, the gap between aspiration and reality is especially stark.
Lucidworks + A&M
Lucidworks brings market-tested, enterprise-grade AI search and orchestration expertise, with clients achieving 391% ROI and being 2.5× more likely to successfully deploy AI.
A&M brings deep operator DNA, sector specialization, and transformation rigor across global high-tech firms.
Together, the organizations provide a trusted, data-driven view of AI maturity that cuts through hype.
Download the Ungated Paper and Build AI That Actually Delivers Value
👉 Agentic AI Readiness: The Stories Companies Tell vs. What They Actually Build
This isn’t just another AI trend report. It’s a blueprint for leaders who want to deliver real outcomes while everyone else is still chasing shiny objects.
Whether you lead a SOC, a fabrication line, or a global software platform: the bubble bursting is your chance to build something better—with foundations that actually last.