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95% of Companies See 'Zero Return' on $30B Generative AI Spend

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Re: 95% of Companies See 'Zero Return' on $30B Generative AI Spend

#41

Post by JCM9 »

highwaylights wrote: post #28
JCM9 wrote: post #16

We are entering the “Trough of disillusionment.” These hype cycles are very predictable. GPT-5 being panned as a disappointment after endless hype may go down as GenAI’s “jump the shark” moment. It’s all fun and games until the bean counters start asking for evidence of return on investment. GenAI folks better buckle up. Bumps ahead. The smart folks are already quietly preparing for a shift to ride the next hype wave…

I wouldn’t be surprised if 95% of companies knew this was a money pit but felt obligated to burn a pile of money on it so as not to hurt the stock price.

FOMO on the way up to the peak is a powerful force. Now that we’re sliding down the other side FOMO turns into “WTF did we just spend all that money on again?”

Re: 95% of Companies See 'Zero Return' on $30B Generative AI Spend

#42

Post by jampa »

The biggest mistake people are making is treating AI as a product instead of a feature.

While people are doing their work, they don't think, "Oh man, I am really excited to talk with AI today, and I can't wait to talk with a chatbot."

People want to do their jobs without being too bored and overwhelmed, and that's where AI comes in. But of course, we cannot hype features; we sell products after all, so that's the state we are in.

If you go to Notion, Slack, or Airtable, the headline emphasizes AI first instead of "Text Editor, Corporate Chat etc".

The problem is that AI is not "the thing", it is the "tool that gets you to the thing".

Re: 95% of Companies See 'Zero Return' on $30B Generative AI Spend

#46

Post by tovej »

aqme28 wrote: post #12

This is why it's so good to sell shovels, so-to-speak. In this case, that's NVDA

The shovel business is good as long as the gold rush lasts. Once the gold rush is over, you're going to have to deal with a significant decrease in volume, unless you can find other customers.

Crypto's over, gaming isn't a large enough market to fill the hole, the only customers that could fill the demand would be military projects. Considering the arms race with China, and the many military applications of AI, that seems the most likely to me. That's not a pleasant thought, of course.

The alternative is a massive crash of the stock price, and considering the fact that NVIDIA makes up 8% of everyone's favorite index, that's not a very pleasant alternative either.

It seems to me that an ultra-financialized economy has trouble with controlled deceleration, once the hypetrain is on it's full-throttle until you hit a wall.

Re: 95% of Companies See 'Zero Return' on $30B Generative AI Spend

#47

Post by jameshart »

jampa wrote: post #42

The biggest mistake people are making is treating AI as a product instead of a feature. While people are doing their work, they don't think, "Oh man, I am really excited to talk with AI today, and I can't wait to talk with a chatbot." People want to do their jobs without being too bored and overwhelmed, and that's where AI comes in. But of course, we cannot hype features; we sell products after all, so that's the sta…

Agreed. We’ve got the potential to build real bicycles for the mind here and marketing departments are jumping right in to trying to sell people spandex cycling shorts.

Re: 95% of Companies See 'Zero Return' on $30B Generative AI Spend

#48

Post by wedn3sday »

IgorPartola wrote: post #34

What are the actual use cases that can generate revenue or at least save costs today? I can think of: 1. Generate content to create online influence. This is at this point probably way oversaturated and I think more sophisticated models will not make it better. 2. Replace junior developers with Claude Code or similar. Only sort of works. After all, you can only babysit one of these at a time no matter how senior you…

One use case I'd love to see an easy plug-and-play solution for is a RAG build around companies vast internal documentation/wikis/codebase to help developers onboard and find information faster. I would love to see less of people trying to replace humans with language models and more of people trying to use language models to make humans jobs less frustrating.

Re: 95% of Companies See 'Zero Return' on $30B Generative AI Spend

#49

Post by ta20240528 »

eldenring wrote: post #29

This is how America ends up being ahead of the rest of world with every new technology breakthrough. They spend a lot of money, lose a lot of money, take risks, and then end up being too far for others to catch up. Trying to claim victory against AI/US Companies this early is a dangerous move.

> This is how America ends up being ahead of the rest of world with every new technology breakthrough.

Too young to remember GSM?

Re: 95% of Companies See 'Zero Return' on $30B Generative AI Spend

#50

Post by md3911027514 »

It’s interesting how self-reports of productivity can be wrong.

For example a study from METR found that developers felt that AI sped them up by 20%, but it empirically it slowed them down by 19%. https://metr.org/blog/2025-07-10-early-2025-ai-experienced-o...

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