The $1.5 Trillion AI Leap of Faith: Are We Investing in the Wrong Future? | Utilizing AI Episode 47

All of humanity is taking a leap of faith, investing an incredible amount of money, effort, and focus on building artificial intelligence. This episode of "Utilizing AI" continues the discussion begun last week with Guy Currier and Olivier Blanchard of the Futurum Group, asking the big questions about AI. What is this for?

Welcome to "Utilizing AI," the podcast focused on practical applications of artificial intelligence and part of the Futurum Podcast Network. Every Wednesday, we explore news and use cases of the ways in which AI is transforming enterprise IT and the industries it serves. I'm your host, Stephen Foskett, founder of Tech Field Day, now part of Futurum Media.

Before we dive into this discussion, let's meet who's on the panel today. Hi, I'm Guy Currier. I'm an analyst at Futurum Research.

I am also chief analyst at Futurum Media, which is a division of Futurum. And I'm Olivier Blanchard, research director at Futurum, and I focus on the intelligent edge and AI devices. So this week, we are continuing a conversation we recently had and sort of taking it to the logical conclusion, the leap of faith, as it were, because all of us, in fact, are taking AI to the logical conclusion with a leap of faith here.

Essentially, all of society, now, you may object to me saying this, but I'm going to say it anyway, all of society has decided to invest huge amounts of money and huge amounts of time and energy and resources and attention into building AI, into building something that has been promised to be artificial general intelligence or, as some people are saying, super intelligence. And the question is, are we actually building that? Is that actually what we as society have decided to build, and are we actually getting any closer to that?

So Guy, I think I'm going to throw it to you first. Tell us a little bit about the leap of faith that we as society have taken. Well, I think it's very understandable.

Let's start with that. 5 release by OpenAI, it was clear and obvious that this was something that could be helpful. Helpful to me, helpful to my company.

You type in just something in plain language, and you get out something that at least looks really helpful. And I think that the models as they have matured and the harnesses and the services and everything as they have matured and the agents that have been built, that has shown itself again and again and again. 5 trillion globally being invested in AI.

The first one is something that I just harp on all the time, which is that the way generative AI, which is what most people encounter as AI, the way it is trained is sort of unconsciously to fool you into it being true and good and useful and helpful. The training dataset is what you might call various masses of human-produced stuff, but it's not like the models understand them. The models are simulating the same kind of output as they consumed during training as input.

And that necessarily logically means that there's no one or thing verifying that it's true necessarily other than ultimately the human user and reviewer of it. So that's one thing. It's designed to look compelling, helpful, truthful.

So the leap of faith in that sense is unconscious. You're being compelled into this leap of faith with AI. And the second element of it is just all of the hype that has surrounded this because people are making lots and lots of money.

And I mean retail folks who have invested are making lots and lots of money. I mean managers who are getting bonused for whatever metrics they're producing, they're making lots and lots of money. So I'm intentionally leaving out the whatever hundreds of people, billionaires globally making even more billions.

I think that calling it a leap of faith is the right thing because we just don't realize the religion, in a sense, that we have joined here and the faith that we are putting into this market. And that Bain report, which I'd love to have a chance to summarize, the Bain report, I think, represented a good faith effort by a really smart and resourceful organization, namely Bain, to try to actually figure out all the numbers here. And those numbers are really stark.

I just want to conclude by saying that the value is obvious. It's the quantity of value that we don't know and how much spending we need to do, and it's not just money, it's time, it's talent, it's attention. How much spending we need to do if that is way more than the value we're getting back, which is how it looks right now.

So what's the right balance? Just where is that line? Right now, we're guessing.

We're making that leap of faith. Eventually, the reality is going to come, and we're going to figure it out. How we get there is likely to be, let's say, challenging.

Indeed. So I think part of the equation here is that we've been so focused on trying to identify the ROI, and I think what Bain did was needed, and we need more of that, especially in a productive way as opposed to just being sort of like by definition anti-AI, especially when we start talking about AI as a religion, which I feel is an adequate trap for a debate. But the value of AI cannot be just limited to money invested and then money produced.

5 trillion, we're going to get six or seven trillion back, or we need to have that in order to make it worthwhile. I think that the broader value of AI to society, to humanity, to civilization needs to be measured in those terms, but in other terms as well. So what can it actually do to improve our quality of life?

What can it do to solve real-world problems? What can it do to get us to the next stage of evolution? And I feel that at least for now, because there's a lot of money to be made and the profit motive seems to be sort of front of minds, especially with all this money coming from somewhere and these companies being accountable to the money, there isn't as much discussion about that.

I think that there are a lot of promises about how this will help us get to Mars and spread to the stars and solve these world problems, but we're not actually seeing that yet, right? We're seeing it in small pockets. I was just talking to somebody who went to an MIT event last week, or this week rather, no, last week, and that was talking about how AI is improving prosthetics.

And so if you've lost a limb or if you've lost the use of some of your senses or part of your abilities, how AI and neural implants and other technologies combined can help you not only regain ability but regain sensation in your artificial limbs. And we've all talked about how AI will probably help cure diseases, cancer being one cluster of them, and how it could help us solve a multitude of problems. Unfortunately, we're not really seeing that yet.

Right now, we're just seeing chatbots, and we're seeing data centers being built, and we're seeing all this churn of investment. And what we're seeing from technology companies, this is something we kind of touched on last week, is sort of like these gadgets and these tools that seem to be solutions looking for a problem, as opposed to solutions that really address existing problems or future problems in a concrete way that can create this broader value that could be injected into this sort of broader ROI question. Because if we go down the route where we're only measuring the worth or the value of these investments in AI in terms of revenue and profitability, we're probably not going to get there anytime soon.

And so that means that we have to focus some of the application of these AI investments towards more humanity-improving or world-improving outcomes, not just revenue, and then we'll worry about the other stuff later. Yeah, the revenue question I think is really important, and it's important even for a cold business analyst kind of perspective because even the optimistic projections, now I don't mean the insane ones, the singularity and artificial general intelligence and the AI god will tell us how to transform society. Let's not go there.

But the normal optimistic projections like the Bain study that you mentioned, Guy, even if we take their cold hard numbers in as accurate, it's very unlikely that there's going to be a transformative return on investment on a dollar basis based on what has been injected into this space already. I mean, simply put, we have already invested over a trillion dollars on AI hardware, much of which I should point out is already obsolete, thanks to rapid advances in AI hardware. And we're very unlikely, and I say we, let me just be very specific.

The businesses who put that money in are very unlikely to extract that money out in a very compelling ROI kind of way. And I think that one of the reasons people are so anti-AI is because of that. Because essentially, they're sitting on the sidelines looking at basically giants wrestling, and they're like, "This doesn't have anything to do with me.

And yet these guys are duking it out and spending all this money and all these resources and sucking up all the narrative, doing this thing that obviously is pointless, that obviously will not end up... So what does this have to do with me? " The question that Olivia is bringing up I think is the most important question for AI, which is we can't just frame it in terms of profitability of NVIDIA and CoreWeave and Google and Meta.

We have to frame it in terms of what is this doing to and for society. " They don't say that anymore. " Yeah.

And what happened to these transformative goals of this thing? I feel like enterprises and organizations can set transformative goals for themselves within that micro level as guideposts. I think the promise is there.

I mean, that's a beautiful thing. I think that what happens is, and I'm going to go back to the sort of faith and religion analogy a little bit. What happens is it's not really carried all the way through.

I think I commented last week that probably 9 out of 10 stories that you hear from people who've used AI to do whatever, build an app, buy movie tickets or concert tickets or whatever, there's a few success stories and then a whole lot of weird things that happened. And what is it? There's something like three times as many applications are being registered at the Apple App Store or Google Play or something like that than ever because it's so easy to build one of those apps now through vibe coding, but the failure rate is close to 100%.

The promise of doing this, to Olivia's point, actually let's make the bigger point. What's the point of all of this anyway? It's to improve our lives, right?

If you think about like we are to a great degree in what we call the content business. We're producing podcasts, we're doing writing, we're doing all of these things, right? We can do these things faster with deeper research, with higher quality.

But what's reading the things that we're writing? Olivia, what's reading what you're writing? There are a lot of humans who are reading it, but there's a lot of AIs who are reading it.

And we seem to forget that the end product of all this sort of stuff is really supposed to be humans. Yeah. I don't know what to tell you.

I mean, that's basically the crux of it, right? I think one of my concerns and no offense to our tech overlords and CEOs of the companies that we work with- You better not offend them. Yeah, well, I might.

I think that a lot of tech CEOs are very plugged in, more so than they might seem, to pretty much everything, and they have access and information that we don't have. But my observation personally is that some tech CEOs may be overestimating their understanding of what's important to the hoi polloi, to the general populace who doesn't have their wealth and privilege and experience of the world. And so even without any nefarious intentions, even if they really feel that they're focusing the efforts of their AI investments in the right direction in ways that will benefit humankind, I feel that they might be completely missing the plot on what actually matters and what doesn't.

" It's fine that they make money and it's fine that they try to gain market share and have the best product possible and make as much money as they can. I have no issue with that. But at the same time, I think there's a balance to be struck.

And if you have that responsibility that you're building tools, these magical tools that have so much potential to alter the course of history and to alter basically the course of everything, with great power comes great responsibility. You have to also balance that with, okay, I'm going to make all this money and I'm going to make my investors very rich, and I'm going to make all my customers deliriously happy because they're going to be able to do things they could never have dreamed to do before and it's faster, better, cheaper. But at the same time, it also needs to first do no harm, or at least minimize that harm, or at least have the harm be completely overshadowed by the benefits.

And there should be more curiosity, I feel, from tech CEOs in terms of how could we actually use this technology to do the right thing and to really sort of send us in the right direction collectively, as opposed to, I think I know, and therefore I will lead the way. And I think that I go back to principles of leadership that I learned in the military as a very young officer learning from my NCOs whose authority was below mine technically, but who had experience that I didn't. And one of the first things was basically, yes, I may lead the way, but I need the right information, the right insights, and the right understanding of what we're trying to accomplish and what I'm surrounded by, what the actual information is before I can really make a decision.

And I feel that they're not necessarily looking or intellectually curious enough to find out how they could be useful and just sort of deciding willy-nilly that we're going to go in this direction and let's hope I'm right. So we need to have a little bit more humility and intellectual curiosity from some of our tech CEOs, and have them talk to people who are more plugged in to the real lives of the rest of us, who are ultimately the users of their technology. Well, I don't want to get political here.

It's going to sound a little political, but I think the same could be said of basically a lot of what's going on in our world. There are a lot of people who essentially are looking around on the left, on the right, in tech, in industry, in a lot of issues, and they're looking around saying, "Why doesn't everybody agree with me? How could anyone not agree with me?

" And I feel like it's the Dunning-Kruger society, where people just don't know what they don't know, and they're not asking the question. " And I just wanted to rip the radio out of my dash and throw it out the window because only about 30% of people were working from home. Everybody else had to still show up because they all had jobs.

They all had jobs that required them to teach or fight fires or cook burgers or work the factories or whatever, right? Now that everybody is working from home, I hear the same tone-deaf messaging coming from Silicon Valley when it comes to AI. Think about it.

Super intelligent AI something is going to transform everyone's life so that they can sit around and enjoy the world. Again, everyone in that statement is only about 20 or 30% of the people who are knowledge workers. The rest of the people who are actual workers are probably not going...

And they're probably really angry about that. And again, I don't want to sound both sides-ism here, but it's not just the right or the left. It's not just Silicon Valley.

Again and again, we hear people say, "This is going to benefit everybody," where everybody means only the 20 or 30% of the people that I'm actually thinking of, and that really ticks everybody else off. Did I get too political? Yes.

Okay. I quit. I'm done.

Where are the pitchforks? I think it's proved itself to be above politics, at least here in the United States, because it is so hyped and there are so many billionaires becoming multi-billionaires. And it's become pervasive physically now.

I have a friend who's a Texas rancher who's being offered... He sold off, he liquidated his own stock. He rents out his land to someone else who carries cattle stock.

He is being offered, I think, $30,000 an acre, if I remember right, by a data center company to build a data center and he doesn't know what to do. He kind of knows what to do, which is to sell. Previously, to sell would be 7,000 an acre, 8,000 an acre, just to give you a sense of the scale here.

If he were to sell to the person leasing the land right now, so that the guy could keep herding cattle on that land, the renter herding cattle, that renter would just buy it at 7,000 and sell it at 30,000. You'd be dumb not to. So now you're seeing for all-- That's just one example of the kinds of things that are bringing AI into people's minds who are not really big users of AI.

And by the way, Steven, you said 30% or something like that. I doubt there's more than 5% of the US population that is using AI with any particular depth. And maybe there's another 25 or 30% that are just using chatbot of one form or another.

Yeah. Well, I will just jump in that that actually is backed up by the numbers. I think Olivier has seen the numbers as well, that especially if you look at a revenue perspective, there are a lot of casual users not paying for anything.

There are a very few aggressive users paying quite a lot of money, but it really is more like 1% or 2% of the population, not 30% of the population that's paying for these. So here's the point. We don't know where the balance is.

The balance isn't there. An understanding, like you say, Olivier, of the broad societal and human impact, beneficial ones. This thing could cure cancer.

It really could, right? It's one of the most promising developments to cure cancer that has come along in human history. But we don't know whether it's time or money or just attention, what investment is needed and how much return we're supposed to get, and what does that mean?

That is a market. It doesn't even have to be a capitalist market. It could just be a market of ideas that is out of balance right now.

We just don't know in what way. It has to adjust. It will adjust.

It's like a law of physics. And when it goes through that adjustment, the things that you're paying attention to now and investing in now, whether as a business or as a person or whatever, they could just disappear. They could be very valuable to you and just disappear because when they go into balance, it turns out that the cost of producing it for you is way too much compared to what they get back from you.

And that's a level of uncertainty that thanks in part to this kind of Silicon Valley mindset that has taken over what I don't know the world when it comes to AI. That's the kind of thing that pushes us closer and closer to this edge. It keeps us blind, unfortunately, and puts risk into the system that people are just starting to become aware of.

No, agreed. And it's not just Silicon Valley, it's also Wall Street, just to be fair. It's both coasts.

I'm going to sort of go off the rails here, but bear with me. Great. We've got politics, religion.

Yeah. Going off the rails. It's okay, I think, to make this a political conversation, and I think it's okay to make politics relevant again.

Not relevant, but acceptable conversation again. Yeah, make politics relevant again. So I think politics, the term, let's not talk politics, let's not make it about politics, I think it's sort of like it's not really serving us super well because the more we do that, the less connected we are and we're not having these conversations.

And I'm not even opposed to partisanship, but I think that this is and needs to be a political conversation in the sense that we're investing a lot of money, whether it's 401 s and banks basically taking these risks with all of our savings and retirements and hopes and dreams. It's also governments investing a lot of money, taxpayer money into this stuff and subsidizing it and helping it along, in the hopes that it will create jobs, which is a fantasy. I don't think that's the right ROI to look for on that end.

But it is a political discussion to have, first of all, about the really being very clear about the dangers and the opportunities and how those things balance out. And I think that guy's straight, right on the money with this imbalance issue. We're also not really having these discussions in Congress.

We're not having these discussions as seriously as we should on the policy side. This is a political conversation, and it's a political task that we need to all sort of demand from our representatives and from other authorities. But I think there's also a discussion to be had about opportunity cost.

If we're spending all this money on AI and in the hopes that it will have some benefits to society that are worthwhile, we're spending money that we could be spending on other things, on education, on roads, on infrastructure, on all sorts of things. Universal basic income, whatever it is, healthcare. The opportunity cost is in and of itself a very political conversation.

So if we're going to invest all this money in AI There had better be a good reason if we're not spending it on all these other things that we know will benefit us in some way. And so I welcome actually more political discussions of AI, fewer technical conversations about AI, fewer financial and ROI conversations about ROI. We're already having those.

I think that it's time for us to open up the conversations that are more political and more societal and looking at the value and risks of AI as a civilization-altering and a society-altering technology as opposed to just fear-mongering and then revenue and profitability being the two polar discussions that we have about it. We need to be broader and more holistic about it. That's it.

I think you're putting it in really good perspective, Olivier, especially the point about opportunity cost. That's another way that this is out of balance. So, if I were to summarize in a sense, I'm talking about the moment we're in as being unbalanced and that we all should open our eyes to that and be aware of it and think and plan accordingly.

And I think you're pointing to, I guess what amounts to a, it's not just political or so much political as a sort of societal adjustment that needs to be made as well for something that's so pervasive and yes, transformative, ultimately transformative. And I think, again, I really think that what you've said here, both of you, but Guy, what you were just saying, I echo, it really is the crux of this conversation that's being missed. I think a lot of people are very frustrated and angry about what's going on.

On one hand, you've got people saying, "Look, if this technology exists, it's going to be developed. " You've got people saying, "We've poured all this money, the gambler's fallacy. We've poured all this money into it.

" And you know what? Those people have a point. And the fact that we can't even talk about it, I mean, Olivier, what you said about politics is so true.

" That should be just intellectual. That should just be what we do. And I love the fact that here we are on an enterprise technology podcast, and honestly, working for a company that is bullish on AI technology and the companies that are behind AI.

I mean, Futurum is absolutely very much a participant in the AI space, but yet we're actually saying, "Look, we're looking at it from a different perspective. " And I think it's very, very good for people in the tech community to be having those conversations because the truth is, if you aren't having those conversations, then you're missing out and you need to understand that the rest of the world is having those conversations. And they're asking, "Okay, we're taking a leap of faith.

What's in it for me? " So I'm going to leave it there for now. This is, again, sort of a conversation of last week's episode.

Please do check out last week's episode. Same bat time, same bat people. We talked about basically, why are these products being developed?

Is this really in answer to a need, or is this something that is just sort of being developed for development's sake? I know that we're going to have conversations like this coming in the future as well. Before we go, Olivier, Guy, I want to give you guys a chance to say where can we connect with you, where can we continue the conversation, and what are you working on this week?

So Olivier? Well, I mean, obviously, the Futurum Group and Futurum Research. The website's always good, and I'm always covering news of the tech world, so there's that.

Also on X occasionally and on LinkedIn. I'm working on a lot of things, but this week, just look for me online. That'll be enough.

com/in/guycurrier. social, and I'm on Xitter too, @guycurrier's feed. What I'm working on this week actually is around application architectures, cloud native in particular, and where we are with that.

Excellent. Well, thank you so much. net.

You'll also find me on the Bluesky. And actually, I am thrilled, or maybe pained, I recorded six podcasts in the last week. Yesterday, I was the guest on "Security Boulevard" where I was talking about my own in-depth technical analysis of Meta's new Muse AI agent, and I highly recommend listening into that podcast.

It was a lot of fun, but also I had a lot to say, surprise, about the Muse agent and how it works under the hood. I also published a companion piece over there on "Security Boulevard," and I'm pretty proud of that because I'm managing stuff more than writing stuff now, so it was nice to get back to writing stuff. So thank you very much for any attention to that.

I appreciate it. And thank you all for listening to the "Utilizing AI" podcast. If you enjoyed this discussion, I would love to hear from you.

Also, please subscribe on YouTube or your favorite podcast application. This podcast is brought to you by the analysts and experts from the Futurum Group, where insights meet AI. ai, the "Utilizing AI" YouTube channel, or the Techstrong TV app.

Thanks for listening, and we'll catch you next week.