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Gartner® Market Guide for Utility CIS 2025

The AI Era Has Begun: But Is It Really Changing How Your Utility Works?

Utilities are under pressure from every angle with tighter margins, stricter regulation, and competition, all while customers demand immediate resolution and seamless digital experiences. It’s no surprise that AI has become a strategic priority in almost every boardroom. However, a different reality often emerges: AI stuck in pilots, innovation labs, or isolated chatbots that never integrate into the core of day-to-day operations. Insights are generated, dashboards are built, but billing errors still occur, collections still linger, and field crews still respond to avoidable visits.

The Dual Innovation Strategy: Building AI-Ready Utilities

Artificial intelligence (AI) offers utilities a powerful way to innovate and enhance customer value. However, operating within strict regulatory environments requires balancing immediate AI benefits with system stability. The dual innovation strategy addresses this challenge by enabling utilities to quickly implement targeted AI solutions for operational gains, while gradually modernizing legacy systems.

What does an AI-powered utility look like?

An AI-powered utility is no longer a vision of the future; it’s a competitive reality. These organizations are leveraging artificial intelligence to automate, enhance, and simplify complex processes across the enterprise. Technologies such as machine learning, natural language processing, smart agents, computer vision, and real-time analytics are being deployed to generate insights, improve responsiveness, and enable faster, data-driven decision-making.

Why do AI projects fail in utilities?

Many utilities operate with legacy systems that are not compatible with the advanced requirements of AI tools. Upgrading to a scalable, cloud-based, and modern infrastructure is crucial for supporting AI integrations, managing large datasets, and ensuring reliable performance. Moreover, due to the large volume of data processing, utilities need systems with a single database and repository to ensure cohesion.