Episode 52: AI and Outsized Expectations

The Circuit

Summary

In this episode, Ben Bajarin and Jay Goldberg discuss the outsized expectations for AI growth and the impact on stock market reactions. They explore the challenges of modeling AI growth and the difficulty of charging more for AI features. They also discuss the potential for AI to accelerate refreshment cycles and the importance of realistic expectations. The conversation highlights the small gains of AI in software and the experimentation stage of AI. They conclude by emphasizing the need to measure expectations and be reasonable in the AI industry.

Takeaways

• Outsized AI expectations have led to negative stock market reactions, as companies have not met ambitious growth models.
• Modeling AI growth is challenging due to variables such as product availability and demand.
• Charging more for AI features is difficult, as customers may not be willing to pay a premium.
• AI may not accelerate refreshment cycles, as the average consumer may not see significant improvements that warrant more frequent upgrades.
• The gains from AI are often small and incremental, but still important in improving efficiency and productivity.