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Are C-Suite AI Bulls All Hat And No Cattle?
Nearly two-thirds of S&P 500 companies mentioned AI during their Q3 quarterly analyst calls.
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Finally, someone has figured out that for AI users (actual customers of the product itself, rather than its processing hardware sales) there are few if any sustainable business models showing actual profit and revenue growth for users. (And the job users do in implementation creates increasing numbers of errors.) Productivity improvement is not actually a revenue related metric. Rarely, if ever, are sales increased by rising productivity. AI use may enhance the prospect of cost reductions in operations but most if not all of those productivity gains will harm labor, consumption and economic growth. So where’s the growth in revenue and real profit? Little if any yet. Google, for one, has figured out that by owning virtually all the AI powered advertising market it can increase its revenue and profits, at the risk of being broken up as a monopolist.
“The most oft-cited use cases for AI in the context of improving productivity are coding and customer support.”
He also might have accurately phrased it “The most oft-cited use cases cited by Wall Street analysts and industry figures are coding and customer support.” More often than not, those successes are extrapolated to enterprises across the broader economy as opposed to a limited subset of industries.
The most cited use cases are more evidence that the powers that be at most companies don’t realize how much time their minions waste putting together useless presentations or content so they can justify their own jobs to board members. AI has been great for me to pull together their BS presentations in much less time since it’s mostly just an exercise in making things sound good and AI is well suited to that.
OMG – You must hope and pray that “the powers that be” DO NOT see this post. AT best it will be a convenient excuse to burden you with more work. At worst, it will be the judication for firing you and replacing you with a much-lower cost young employee since, “after all, AI is doing all the work we’ve been giving him!”
This is America where every person and every product much pay its own way. That includes AI.
AI talk is quasi obligatory now, as was ESG talk and diversity talk previously. My sense is that companies are no longer getting price reaction boost from AI talk on the earnings call, so perhaps we’ll see less of it going forward. Or not. Many large public companies have margin incentives to RIF, and dressing it up as AI efficiency sounds good.