The AI graveyard: a look at failed projects and startups in the AI space

Relay, an AI-powered workflow automation tool, shut down on September 15, 2026, after struggling to compete with larger platforms like OpenAI and Google. The AI industry has seen a high rate of failure, with 42% of AI initiatives abandoned by their corporate parents. OpenAI, despite its success, has faced setbacks, including the shutdown of its video-sharing platform Sora in March 2026 and the discontinuation of ChatGPT Atlas in August 2026. Apple delayed its improved Siri, leading to a $250 million settlement, while Microsoft’s Recall feature faced privacy concerns and continued controversy. Notion Mail is set to shut down on September 22, 2026, after failing to gain traction. Hardware projects like Humane AI Pin and Rabbit R1 also faced challenges, with Humane shutting down in February 2025 and Rabbit continuing to update its product. Yupp and Figgs AI also closed down, highlighting the difficulties in achieving product-market fit in the AI space. Other notable failures include Huxe, an AI audio app, which shut down in May 2026, and the failed attempt by OpenAI to create a super app. These examples illustrate the challenges and risks involved in developing AI products, underscoring the need for innovation and adaptability in the rapidly evolving field.