After years of hype, 2025 brought a sobering truth: AI systems fail at complex tasks 70% of the time, hallucinate legal claims 17-33% of cases, and companies are finding success only by treating AI as augmentation rather than replacement. This article examines how the industry's collective awakening is reshaping our approach to machine intelligence, from Microsoft's "30 years in 3" promise to the reality of fixing AI's outputs more than using them.