Why the AI Graveyard Matters Right Now

A recent TechCrunch report lists dozens of artificial intelligence projects and startups that have shut down or failed to meet expectations. From buzzy hardware like the Humane AI Pin to once-promising tools like Relay and Notion Mail, the list shows how quickly the AI landscape can shift. The lesson is not that AI is a fad — it is that building a successful AI product is harder than it looks, even for deep-pocketed companies.

What stands out is the pattern. Many of these failures were standalone tools that larger platforms eventually copied or absorbed. Features like voice assistants, image generators, and workflow automation are now being built directly into operating systems and popular apps. That leaves small startups scrambling to justify why users need a separate product, and many simply cannot.

The Real Risk: Betting on the Wrong AI

For Australian businesses watching this trend, the takeaway is clear: not every AI tool is worth the hype. Many of the failed projects in TechCrunch’s list had slick marketing and early press buzz, but they lacked staying power because they solved a problem big platforms could solve more easily. Others, like Microsoft’s Recall, crashed into privacy concerns that users weren’t willing to overlook.

The danger is wasting time and money on tools that might vanish next year. SMBs often have tighter budgets and less room for experimentation. If you build a workflow around a niche AI product and it shuts down, you lose more than the subscription fee — you lose the data, the training, and the trust your staff invested.

What This Means for Australian SMBs

Australian small and medium businesses face unique challenges. We operate in a smaller market than the US or Europe, which means fewer local AI providers and less negotiating power with global vendors. When a flashy AI startup disappears, we often feel the impact more because our alternatives are limited.

This doesn’t mean you should avoid AI entirely. It means you should treat AI adoption like any other business decision. Ask yourself: who built this? How long have they been around? What happens if they go under? The safest bets are often tools embedded inside platforms you already trust — like Microsoft 365’s Copilot or Google Workspace’s AI features — because those companies have a track record of supporting their products for years.

What You Can Do Now

  • Audit your current AI tools. List every AI-powered app or service your team uses. Check if the company behind each one is stable, profitable, or backed by a larger parent. If you find any that are small or recently funded, have a backup plan ready.
  • Focus on problems, not features. Before adopting a new AI tool, clearly write down the business problem you want to solve. If the tool’s only appeal is “it uses AI” — and not that it solves that specific problem efficiently — skip it.
  • Prefer platform-native AI. Whenever possible, use AI features built into your existing software (like your CRM, email, or accounting system). These tend to be more secure, better supported, and less likely to disappear suddenly.
  • Train your team on adaptability. Teach staff that any AI tool might change or shut down. Encourage them to keep records of workflows and data outside the tool, so you can switch if needed.
  • Talk to an expert. A technology partner can help you evaluate AI options without the hype, saving you from common pitfalls that have already tripped up bigger companies.

At MS&VG, we help Australian SMBs navigate exactly these kinds of technology decisions — from choosing reliable AI tools to building digital transformation plans that last. If you’re unsure whether your current stack is built to survive the next wave of change, we’re here to help you sort fact from fad.