From extreme ups to startling downs, every week can feel like the peak of expectations and the trough of disillusionment for AI.
SHOW: 954
SHOW TRANSCRIPT: The Cloudcast #954 Transcript
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SHOW NOTES:
THE UPS AND DOWNS OF AI - THE CONSTANT HYPE CYCLE
Healthy Competition [YES]
Consumer and Enterprise Markets [YES]
Market leader(s) [YES, sort of]
Well-Defined, profitable business model [NO]
Open, lower-cost alternative emerged [YES/NO]
Usage patterns emerging [YES/NO]
- [ups] Constant high-profile VC, Sovereign wealth, hyperscaler funding of AI startups
- [ups] Constant high-profile CAPEX spending by hyperscalers, model builders, data center builders
- [ups] Rapidly growing user-bases
- [ups] Growing revenues at some companies (NVIDIA, OpenAI, Google, Microsoft, Anthropic)
- [downs] Growing losses at high-profile companies
- [???] Frequent, high-profile movement by key people at high-profile companies (engineers, leadership)
- [downs] Frequent, partial acquires of founders and key engineers, but not entire companies
- [downs] Secondary market scales of startup shares, bypassing traditional secondary and public markets
- [downs] No “NetFlix of AI” company
- [downs] No “AI Agent” success stories
- [???] Consumer “winner-take-all” mindset from AI companies
- [downs] Enterprise companies struggling to create ROI+ projects (in early days)
- [???] Enterprise “bundles” raising prices (CoPilot, Gemini, etc.)
- [downs] Unclear if new frontier models are getting better than previous versions (e.g. GPT-5)
- [???] Are inference prices coming down?
- [ups] Consumers have many excellent AI choices
- It’s unclear if AI companies have created any moats yet; it’s unclear if LLMs can be differentiated
- Chatbots, developer-assistants and document management are use-cases. What else?
- Are agents ready to be mainstream yet?
- Pick-axe providers are making the money right now (NVIDIA, Broadcom, etc.), but is there moat entirely on super-premium HW?
- User-experiences are still being understood
- Will AI + Ads (business model) be a big bang event, or happen gradually?
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