For many organizations, AI is proving easy to pilot but difficult to scale. Pilots often look inexpensive because they run on narrow datasets with a handful of users, explains Ben Schein, chief AI and analytics officer at cloud software company Domo. “But the cost lives in deployment, the moment you connect that capability to real workflows and the systems of record behind them,” he says. “That’s when the real bill appears.” So CIOs must always budget for the gap between when it works in a demo and when it produces governed and durable value.

Organizations can easily get caught out because they run pilots as a technology experiment instead of a business initiative, he adds. “The interesting question is never whether AI can do the thing in a demo,” he says. “It’s whether it should run in this process, and whether it survives contact with production.”

There’s also a lot of pressure on IT teams to be doing something with AI simply because everyone else is, says Naren Gangavarapu, chief transformation and AI officer at Australian Cruise Group.

He calls it AI theater because there’s a big show around AI even though there aren’t that many successful applications of the technology in production environments.

AI costs out of control

According to John D’Emic, CTO at AI observability platform Revenium, one of the big traps when running a pilot is failing to anticipate how quickly consumption can spiral as adoption grows. “As an example from our own engineering org, back in May, a developer opened an AI coding session on his laptop, and it stayed open for four days,” he says. “By the time it closed, it had run 4,819 calls and cost us $3,762. We didn’t budget for this, and no alert fired. But that one session cost more than a lot of teams spend on their entire monthly AI tooling.”

While this showcases how a developer can make a costly error, Dmitriy Anderson, CIO and digital and social commerce leader at home and gardening retailer Leroy Merlin South Africa, believes the pilot trap frequently happens when employees with little or no software development experience vibe code applications. “It doesn’t matter if you can create something in 15 or 20 minutes if the result is AI slop,” he says. “Think dirty code, no consideration for safety, security, and possible data exposure.” In most cases, these pilots are developed with one of the frontier apps, and someone probably used their personal AI subscription, so the costs are negligible, he adds. But if you have a company of several thousand people, and you now want to roll this tool out more broadly, that’s where costs can get out of control.

This scenario is only exacerbated by the introduction of agentic AI, D’Emic adds. “Agents don’t spend money at human speed,” he says. “In the old cloud days, an engineer could spin up infrastructure in minutes and finance might not see the bill for a month, which was painful but recoverable. Agents, though, call APIs around the clock without waiting on anyone’s approval.”

Mind the trap

While cost is a big factor in the AI pilot trap, it should be treated as a symptom of a bigger problem, says Schein. The underlying issue is governance and observability. “An autonomous workflow can fan out into more queries, API calls, and model invocations than anyone scoped,” he says. “So if you can’t see what it’s doing, and spend compounds quietly, you only find out once the invoice arrives.”

In a recent LinkedIn post, Anderson outlined how in just six weeks he built a platform for a fraction of the sticker cost using three AI models orchestrated together. The traditional estimate to build the same tool would have required 2,472 engineering hours from a team, and was expected to take around nine months. “I went through the proper engineering steps and planning, and made sure the application passed a series of cybersecurity frameworks,” he says. “The purpose of this exercise was to showcase that AI can still speed up the process even if you take the time to work through the necessary steps. You can build with AI rigorously and securely.”

So to turn AI experiments into enterprise value, every AI interaction must be attributable: who triggered it, against what data, on which model, and at what cost, Schein says. For each workload, be sure to ask how often it runs, which model tier the job actually needs, and what triggers it, human or automatic. “A frontier model on an automatic trigger and a small model called on demand are completely different cost curves for the same task,” Schein adds.

For Anderson, it’s helpful to use AI to highlight potential gaps, assumptions, or blind spots in your ideas early on. “When you start building an idea, ask the agent to interview you,” he says. “It will go through every phase and ask questions about the important facets of the process, from scalability and budget to deployment options. You can even make AI write a prompt for itself, because it knows its capabilities and quirks better than you ever will. It’s called meta prompting.”

Anil Inamdar, global head of data services for the Instaclustr BU at NetApp, suggests CIOs cost out the whole program, not just the demo. “Generally, the model itself is the cheapest part of the program,” he says. For him, it’s important to have security and governance people in the scoping meeting, not the launch meeting.

He believes the pilot trap is also, or perhaps mostly, a sequencing trap. “A lot of teams are wired to build first and ask permission later, only to discover months down the line they can’t pass a security review or data privacy audit without a painful and costly rebuild. It’s also valuable to define what failure looks like before you define success.

“Pilots tend to die because of no result, which isn’t the same as a bad result,” Inamdar says. “Emphasize to the deployment team on day one that if a target result by a certain month isn’t seen, we shut it down. Otherwise, you’re funding a zombie pilot because everyone’s invested and no one wants to be the one to call it out.”