C3.ai Scores HHS AI Deal Amid Dwindling Trust in Agentic AI for Core Processes

Only 6% of companies fully trust AI agents to handle core business processes, according to a new Harvard Business Review Analytic Services report. The survey, which included 603 global business and technology leaders, found widespread hesitation to let AI manage high-stakes workflows. Most organizations remain cautious, with 43% restricting AI to routine tasks and 39% limiting it to supervised or noncore functions.

Agentic AI-systems capable of making decisions with minimal human oversight-is spreading quickly, but trust remains tightly constrained. The report highlights a stark divide between enthusiasm for AI and confidence in its ability to manage critical operations. Companies are experimenting but are not yet ready to let AI operate autonomously in areas that affect finances, customers, or the workforce.

The survey also found that 9% of organizations have already fully deployed agentic AI, and half are piloting or exploring use cases. Despite this, only 20% of companies say their infrastructure is fully ready to support agentic AI for core processes. The gap between adoption and readiness is widening as 86% of respondents expect increased investment in AI over the next two years. However, many organizations remain hesitant due to concerns over cybersecurity, data quality, and governance.

Risks to the Outlook

Security and privacy worries are the top barriers to AI adoption, with 31% of respondents citing these as major challenges. Data output quality, unready business processes, and infrastructure limitations also hinder progress. These concerns reinforce a tendency to keep AI agents away from customer-facing or mission-critical workflows. Without robust data governance and quality controls, the risk of "garbage in, garbage out" scenarios is high, which could erode trust in AI rather than build it.

To address these issues, many organizations are turning to "enterprise orchestration," connecting systems, data, and applications into a governed layer that can safely power AI agents at scale. Eight percent have already implemented such systems, and 74% are either working on it or planning to do so. This shift reflects a growing recognition that AI needs to be integrated with strong governance and infrastructure to be effective.

What This Means for Investors

The HBR report underscores that people and change management are decisive factors in AI adoption. Forty-four percent of organizations are prioritizing training or upskilling employees in agentic AI oversight, while 39% are building responsible AI guardrails. Some are appointing AI ambassadors to guide teams through early pilots. These efforts indicate that the success of AI depends not just on technology but on how well companies can reskill and reorient their workforce.

Despite the low trust in AI for core processes, 72% of respondents believe the benefits of agentic AI outweigh the risks. The report suggests that as companies invest in orchestration, governance, and workforce readiness, the trust gap may narrow. AI agents could transition from experimental tools to trusted stewards of workflows that define corporate performance. This shift is likely to take time, but it signals a long-term opportunity for companies that can navigate the challenges ahead.

Why the C3.ai Story Matters

C3.ai, an enterprise AI software provider, recently reported a quarterly loss of $0.25 per share, better than the estimated $0.32 loss. The company posted revenue of $75.15 million, exceeding expectations by 0.04%, and has surpassed consensus revenue estimates three times in the past four quarters. While the results represent an improvement, C3.ai still faces deepening losses, with a net loss of $104.7 million in Q2 2026.

The company's stock has fallen nearly 60% this year, despite a recent deal with the U.S. Department of Health and Human Services (HHS), which selected C3 AI as its enterprise AI platform. The partnership is expected to help HHS integrate data across the National Institutes of Health and the Centers for Medicare and Medicaid Services, improving data governance and research capabilities. However, critics remain skeptical about C3.ai's ability to scale profitably, and the stock's premium valuation compared to peers highlights the uncertainty around its path to profitability.

What Analysts Are Watching

Analysts are closely monitoring C3.ai's ability to reduce costs and scale revenue. The company's non-GAAP gross margin of 52% and expectations that profit margins could eventually reach industry levels of 13.1% underpin the bullish case. However, the company's deepening losses and reliance on partner-led deals raise concerns about long-term sustainability. With 90% of deals described as partner-led, bears argue that C3.ai's growth depends heavily on the success of its partners, adding to execution risk.

For now, the focus remains on whether the company can stabilize its operations and deliver on its AI vision. The recent HHS contract is a positive development, but investors will need to see consistent progress in both growth and profitability to justify the current valuation. With a Zacks Rank of #3 (Hold), C3.ai is expected to perform in line with the market in the near term, though the long-term outlook will depend on its ability to turn around its financials.