Why did AI research nearly collapse in the 1970s after such promising beginnings?

The answer

The first AI winter (roughly 1974–1980) was triggered by the 1973 Lighthill Report commissioned by the British Science Research Council. Mathematician Sir James Lighthill concluded that AI had failed to achieve its 'grandiose objectives' and that most advances were limited to toy problems that wouldn't scale to the real world. The report led the British government to slash AI funding dramatically, and DARPA followed by cutting its support for undirected AI research. Combined with the proven limitations of perceptrons and the inability of early systems to handle the 'combinatorial explosion' of real-world complexity, AI research entered a prolonged funding drought that lasted years.