The Story after The AI Bubble - 11 Shifts for Strategy and Storytelling

Right now, the AI bubble is so inflated that the entire American economy leans on its hype. Today we’ll discuss eleven major shifts and insights in these turbulent artificial intelligence times for you to base your strategic and storytelling steps on. Preferably before bubbles burst. Fasten your seat belts...

Oh, the existential questions... (image credit Futurama)

Insight 1 — Growth Is Not Exponential

The promise of artificial intelligence is that it will unleash an exponential productivity revolution. That promise no longer seems realistic. According to MIT’s summer survey, 80% of Western organizations have now started generative AI pilots, with 40% of the total having fully integrated the tools. Of this entire group, 95% report zero return. The latest McKinsey report shows similar figures: over 80% of companies that have fully adopted AI see no measurable positive results.

Now I know what you’re thinking: you yourself are experiencing benefits. Yes, but often with simple search and tasks. And just look around you, are we really experiencing a revolution? The problem of the promises are the quality, the speed, and extremely high costs of developing. It just doesn’t add up. Even coders, the group that should have the most immediate gains, feel the sting. They often lose more time with AI correction (vibe coding cleanup) than they gain.

AI adoption has actually been declining since June this year (source US Census Bureau/Fortune). Gartner has declared the hype ‘over’, with the productivity plateau — the highest achievable productivity — now within reach. Gen AI enters the ‘Trough of Disillusionment’ in their hype cycle, which is pretty quick to say the least.

The case can even be made for a feedback loop with chipmaker NVIDIA at its center. They keep beating the hype drum, rake up cash from share dumps, invest this cash into other tech companies, and these others then buy their chips, which starts the loop all over again. At the very least it’s a strange way of doing business: if you’re doing so great, why would you provide the cash for sales of your own product yourself?

All of this creates the illusion that AI generates revolutionary productivity and revolutionary revenues. Now of course, AI usage will grow steadily, and there is revenue (such as OpenAI’s $12/13 billion). But the current batch of contracts, subscriptions and the stratospheric high losses on energy and funds (it costs them roughly five bucks, that one image you just generated… and they are pumping trillions into it all together) just don’t match these mega valuations.

Important analysts are now ringing the ‘bubble bell’ everywhere. From The Economist to Bloomberg to Fortune to The Atlantic, we see bubble articles popping up, with even comedian Stephen Colbert unable to restrain himself. Investors are warning for corrections and the famous Warren Buffet has off-loaded tech, while stockpiling cash as he did just before the Credit Crisis, raising eye-brows indeed.

All in all, now that the hype settles, we find AI very interesting. But the amount of money pumped into it demands a revolution, today. And we’re just not going to get that. If ever.

Insight 2 — Brand Trust Doesn’t Rise with AI

Moreover, it’s not AI, but our historically low brand trust that remains the most important story in all of business. Let me be crystal clear what the problem is: in the boardrooms we keep talking about AI. There is no storytelling session I do these days where it’s not mentioned. But on the streets? Nobody truly cares.

On the streets, consumers, citizens and your own personnel care only about a world going to hell. Recruitment, diversity, sustainability, and storytelling are the key issues in business today and have been for a while now. None of that has changed with the adoption of AI. In fact, those issues have only become more prevalent because of it.

Its emotional intelligence — not artificial — that is in high demand. Yet this market need is insufficiently met. As such, and despite AI investment, our profits are down.

About 4/5 of all big global brands in Havas Media her Meaningfulness survey could disappear tomorrow with nobody caring. For reference, this is a survey of somewhere between 2000 and 2500 brands worldwide, with hundreds of thousands of respondents… on brands that together spend trillions on their branding. And 4 out of 5 of them could disappear without consumers giving a damn. That’s just crazy.

And numbers-wise I’m just scratching the surface here. There is a reason Edelman called our zeitgeist “The Age of Distrust”. And it’s not a good one. In fact, the situation is so dire, that trust in all institutions in media, education, business, NGO and politics is at an all-time low, according to Edelmans Trustbarometer.

All economy, all business, all money valuations and all markets… it’s all based on trust. If you don’t have trust, you can’t make profit. The end result of the current age of distrust is that companies cannot charge premiums for products and services. When you don’t meet demand of the market, you have no choice but to lower your price.

This of course explains the problem we’ve been having for a long time now: commoditization. While our annual marketing budgets keep growing, and investments on tech keep rising, we also see the lower growth, lower margins, and lower profits so typical of these times. In that light, why even bother with AI?

It just feels extraordinarily naive. Those who continue to over-focus on tool-driven efficiency lose connection, and thus, revenue. In other words, when you jump onto the tech-hype-train too often, which many of us arguably do, then contrary to the group-think we see in the boardrooms, your marges go down. Not up.

Meanwhile, brands that do put their focus on recruitment, diversity, sustainability, and storytelling show tens of percentage points of growth. For instance Sephora saw a 25% increase in revenue in 2021 with a focus on diversity and keeps growing. There are plenty of examples of brands who connect in the gaming space like Louis Vutton with League of Legends, and getting tons of new young clients through that storytelling. 

Big ideas are still impactful, probably even more so, because so few companies and leaders have the guts to implement them these days. And most importantly for this article: that’s an abundance mindset that’s independent, or even contrary to AI development. And so far, it seems to be the financially more successful one.

Insight 3 — AI Helps Challengers with Product Development

Of course, none of this is new. For decades now, the distance between the boardrooms and the streets has been growing. And that means there are openings in the market for newcomers to jump in. That low brand trust has another effect: it opens the door for specialists. And there’s one group that, according to that AI/MIT report, does have clear AI advantages, and that’s the challengers to legacy companies.

That makes immediate sense. Challengers are stealing revenue because legacy players are slower to respond to demand. Yet notably their profits originate only in part from the latest marketing-tech, which are already commoditized anyway (as in everybody using similar performance marketing tools). The real gains for challengers are — again — on sustainability. Specifically sustainable product development.

Challengers don’t need as much brand storytelling compared to legacy players, especially if the products are ethically and sustainably sourced in combination with high quality (the Seamless trend). With a reasonably strong product, every efficiency advantage — including AI — suddenly has double impact. The end-result is that their distance to the customer is both emotionally and functionally much smaller.

Insight 4 — Your Moneymakers Are Turning Away

On the other hand, the distance between many business leaders and their moneymakers — staff, creators, talent, consumers — is growing visibly. Too many leaders shout ‘AI implementation’ to shareholders and then proceed to both downsize and roll out AI slop that proves ineffective. That current recruitment message doesn’t help either: ‘Come work with us on AI stuff… so we can make you obsolete!’

This cycle then reinforces itself: the more the boardroom wants more AI-driven efficiency, the more your actual workers are slowly cranking up their middle finger, and efficiency goes down. For now, the end result is a neat little cycle that can best be summarized by the words of Nobel Prize winner in the Economics, esteemed Professor Acemoglu: “Meh technology that takes jobs and annoys us all.”

The consequences for the bottom line should be clear immediately; you’re losing your real moneymakers, while the automated output does not compensate these losses. It’s like a fever dream: where you leaders really so greedy that you forget to check what AI actually does, instead of believing the hype? All of this is because of a simple reality that too many leaders refuse to accept: even though AI mimics the human ‘networked’ brain, it is not capable of making new neural connections the way animals and human beings can.

AI doesn’t generate. It calculates. 

Despite that misleading marketing name of ‘generating’, an AI can’t actually generate. It can only connect existing datapoints, and churn out the most probable combination. So, in order to ‘learn’ — which by the way is another misleading marketing story, since an AI cannot ‘learn’ and can only connect based on input — all these AI’s need bucket loads of human content. And to reach that revolution level, it needs much, much more of our data than it has already largely scraped from the web.

Gradually, it accumulates more human content while we input things, but let’s just say the speed of human content input nowhere near justifies the words ‘productivity revolution’. Worse still for our beloved AI overlords… these puny humans! With their pesky emotions! Who are supposed to feed the machine with their data!… are actually resisting!

In times when corporate greed has already created the highest mistrust in recent human history, AI implementation is just the latest symbol of corporate misconduct: while stock prices rise artificially, real people are being laid off. It’s quite tone deaf in a time when boycotts already pose a true, sometimes even existential danger; see Disney with Jimmy Kimmel or the collapsing Target.

The first companies therefore, are now pivoting on AI. Spotify embraced AI generated music in May. But when artists started walking away, they launched identification tools in September to ban AI music. I’m not really predicting with a glass bowl here if I state that more channels will follow, since they too are at risk of losing their — very real — moneymakers. And AI slop isn’t replacing that revenue. At all.

It’s part of a pattern: your people, your customers, and your moneymakers are most of the time, not super fond of AI, use it for things that do not give you revenue, and in many ways turn away from AI. The boorish intro of AI actress Tilly. Large audiences such as Catholics with The Pope calling AI an “empty cold shell.” Reddit founder Alexis Ohanian said: “So much of the internet is dead, quasi-AI slop killed it.” Even Taylor Swift got heavily criticized by her own fans after AI use. You know, that loyal fan generation that was supposed to fully embrace AI within blinking.

Insight 5 — Gamers Aren’t Playing… as the Entertainment Industry Cracks

As always, the gamer demographic are the best indicator for tech adoption. And yes, they are blinking. In this group, AI is hated with intensity. First of all, it drives up graphics card prices and reduces their availability, leading to inflated (and inflation-fueled) hardware prices. Secondly, the AI-craze leads to massive lay-offs and productivity losses that plunge beloved games into utter darkness, such as what fans of Subnautica, PUBG and Last Epoch are experiencing with publisher Krafton’s new ‘AI-first’ directive. And thirdly, this is all done by managers and executives who seem to be utterly clueless on how a videogame is even made.

That has led to CEO Strauss Zelnick of Take Two — the developer of the highest grossing single game releases of all time with Grand Theft Auto — to state: “AI is going to be really, really bad at making video games and probably couldn’t even come up with the GTA 6 marketing plan.” Mind you, gaming is the largest entertainment market on earth. And GTA is its pinnacle product.

Ouch.

So, predictably, here too we now see the ‘moneymaker shift’. The AI-driven layoffs at legacy players like EA and Microsoft can’t hide the lower productivity, regardless of recent major stock market and cash moves. As a result we already see unsurprising backtracking actions with solemn anti-AI promises for games like Battlefield 6. They have no other choice, since gamers are voting with their feet, with indie games regularly beating the big boys in sales.

This is part of a broader pattern in the entire entertainment industry, where the storytelling quality of the legacy entertainment companies has been declining for quite a while now (with a few exceptions). The result is rising costs and lower margins, while consumers move to cultural niches.

Don’t be fooled by all these mega-investments; there is a reason why we’re seeing so much consolidation going on, and why the big boys are sucking up to the likes of the US president to loosen the rules on monopolies, even sacrificing a comedian here or there... it’s not going as well as they’d like. 

The problems these legacy players are having come from decades of decision making by ‘suits’ pressured to show record earnings on shareholder meetings every three months. Viewed this way, AI implementation isn’t the future. It’s a rather desperate attempt to turn their tide by embracing its perceived efficiency and cost-cutting advantages… while all the while ignoring the elephant in the room: the quality of writing, ideas and storytelling needs to go up. And all those people they keep laying off to alleviate that quarterly nose around their necks? They were the ones who could’ve given them that. 

In fact, we already know for certain that those perceived AI advantages are not going to pan out any time soon in the entertainment industry. The promised revolutionary gains simply aren’t there. That means the bubble is spreading to much more than just the tech companies building chips and AI. These legacy entertainment players, or at least those with a heavy insistence on AI, are now just as vulnerable.

For gamers, this is familiar territory. We’ve seen these legacy players lose contact with people and reality before. And we’ve seen them lose tons of money over it too. In fact, we’ve known this hype cycle since the failed Linden Dollars from Second Life (2003) or the decades-long Virtual Reality illusions.

Hundreds of millions of gamers rolled on the floor laughing for months because of the metaverse hype. Especially those NFTs were hilarious. As if virtual words were new. And coins in Super Mario were never invented. Billions upon billions going up in smoke. And these suits kept banging that drum. It was downright side-splitting.

Meta is doing it again now by the way. They’re calling their VR & AR division staff to be 5 times more productive by using their own AI tools. AI tools that are mediocre at best. The denial is so utterly complete, it baffles the mind: $45 billion has been burned. In the words of indie gaming boss Michael Douse of Larian Studios (Baldur’s Gate 3): “AI isn’t going to solve the big problem of the industry; leadership & vision.”

And that’s what brings us to the real kicker: leadership in Silicon Valley.

Insight 6 — The End of the Tech Religion Is in Sight

The big difference with those optimistic times in the ’90s, and its fast rollout of the internet, is precisely as stated by Michael Douse: a lack of leadership and vision. Nerds back then dreamed of freedom and more social contact, and built their internet protocols on that, which are still standing today. 

I know that because I was there. I always call those ‘The times of free beer and BBQ’s’ as new internet companies were just handing it all out, especially to creatives and artists. Right now? This revolution? No one is feeling it. Sure, you can be amazed by a response from an AI. But it’s not on the streets like it was in the 90’s. The freedom, the buzz, it just isn’t there. 

In fact, this new batch of AI-nerds, are building their protocols on control. They want to completely isolate these ecosystems, and have you pay for it all. So, this is in no way comparable to the rise of the internet. In fact, the start of this AI movement is its polar opposite. The early days of the internet were a celebration of artistic expression and experimentation, sometimes with a — painfully slowly loading — picture of a woman in bikini in between. AI’s early days are characterized by fascism, election fraud, porn deepfakes, war robots, racial discrimination, extreme energy costs (paid by you, the consumer), unprecedented data theft…

And oh yeah, lest we forget: an avalanche of utterly useless AI-slop.

In essence, with the advent of AI, the Silicon Valley tech-religion is approaching its end. Our belief in tech gave us computers, internet, mobile phones, and great blog sites such as this one. It made many a dream come true, and still is. But it has now turned into a nightmare under dictatorship-supporting men like Peter Thiel, or villainous men like Kurzweil who openly wish to live forever, and hope AI can give them that eternal life, your election fidelity be damned.

It means that although we once put our Silicon Valley techbros on a pedestal, the tables have now irrevocably turned the other way: every last bit of respect we had left for them, is just simply gone. In the words of comedian Josh Johnson for one of his great shows: ‘Tech Titans, Tiny Thinking.’ 

Insight 7 — The Business Model Has Quite the High Price

The Silicon Valley dream is actively being destroyed by the tech bros themselves. Its promise was always expression, freedom, and prosperity for the people. But the AI mission statements call for the destruction of precisely that. They literally say that all labor and all art can be replaced and even label employees as ‘tax’. 

That’s not freedom. Not expression. And no prosperity for the people. It is only freedom, expression and prosperity for a handful of tech titans.

Although shocking, you might want to step back for one second and allow a penny to drop; these types of superlative words are only ever used by people who doubt what they are saying. If you can park your indignation for a second, and look at it objectively, what is signals is that these techbros seem to be very unsure that AI could ever achieve what they promise. Why else go through such great lengths to try and convince us?

In other words, they might secretly be worried too. And that shouldn’t surprise us really. These are not the same techbros as Steve Jobs and Steve Wozniak were. They haven’t really created anything original. They’ve used a mathematical principle of network nodes, and created something over your back and mine, with our data. On the schoolyard? They’d be the bluffing type.

You see, we may be overlooking one fact here way too often: all of this is based on the largest theft in human history. It has not been created. It has been stolen. And then calculated. 

We’ve only just begun to address the copyright issues here, with many court cases still to come at this time of writing. It even raises an eyebrow on Sam Altman’s response to one of his people dying under mysterious circumstances. A person who was about to expose the global copyright theft, just before it happened.

Yes, I went there. I don’t know if Altman did anything nefarious. But the corruption here is oozing. Starting with the theft of all of our work. That includes by the way, the work of yours truly. They have stolen all my books, all my music, all my blogs, to make their LLM. And now they wish to replace you and me both. Without so much as a notification.

We then see them sucking up to a felony-convicted president, bribing him with tens of millions… We know in our hearts: this isn’t normal business. Normal businesses don’t work that way. This is mafia. The price we pay for AI is therefore plain and simple: corruption. And as it’s based on theft in the first place, what did you expect?

And before you say that this is also the price of progress, consider what you think is progress… is that technical innovation? Or is progress enforcing a law that punishes stealing stuff? 

Insight 8 — The American Economy Will Suffer Most

And now, in a last, desperate attempt to keep the Silicon Valley tech-religion alive, many American companies have now gone all-in on AI. If you take away those investments, there isn’t even any economic growth right now. In fact, all the signs and signals are in the deepest of reds in the US. Tariffs. Housing prices. Purchasing power. Inflation. Budget deficit. University incubators. Healthcare. Consumer confidence. Grounded flights. Job listings… The list is endless. 

America’s democracy and its economy are drowning in a cocktail of ICE raids, culture wars, shutdowns, shakedowns, campaign donations, and bribery in broad daylight. Even John Grisham couldn’t have imagined it this crazy: we’re granted on man a trillion dollars, while 40 million are on the brink of starving. There’s Great Gatsby themed parties going on at the president’s private house, while the White House is literally in shambles, and a gigantic pedophile network is up in the air, ready to crash said party.

Let that sink in for a second.

And let’s keep it real here. There is just no way this kind of stuff ever holds.

The world economy has reacted accordingly. Dollars are sold off, pension funds switch to Europe, and gold is swinging wildly up and down. The coming recession will be a blow for all of us. European economies will suffer too with their high national deficits. But both Europe and China are just better positioned, taking better care of their moneymakers, the people. Moreover, they are positioned on the crash they know is coming. And that crash will be more than just markets gone haywire.

Insight 9 — Not So Much an AI Revolution… But a Real One

Of course there’s nuance. Americans are hard workers. And there is a large amount of capital in America to bounce back on. Really, America will be great again. But it’s going to take quite some time before it gets there. It has to first wade through its swampy political-economic system, its corrupt Supreme Court justices, and increasingly so, its own military being deployed against citizens. It sounds tough. Yet, there is real hope. They’ve been here before against the Brits, against the slavers, against inequalities. And they won.

The people in the US know all of this in their bones. The average American is joining en masse in record-breaking protests like No Kings. And it’s not just there. Not the growth of the inept extreme right movements, but the anger of the normal people in the middle classes and younger generations is driving revolutions in Nepal and Madagascar and mass protests in Georgia and Serbia.

Protest worldwide is rising across the board, almost everywhere. And these protests are against oligarchy, against a corrupt tech elite, against the wars that are fueled by them and against their dying neo-liberal worldview, in which markets should be as free as people, no matter the consequences. That too… it’s just not gonna hold.

So, it’s really not an AI revolution you need to look out for.

It’s a real one.

Insight 10 — Not AI, But Energy is The Real Innovator

Real progress is emotional. Think: Renaissance, Maarten Luther, The Enlightenment, democracy, freedom of speech, abolishing slavery, women’s voting rights, the end of Apartheid, the presumption of innocence clause. But also, Apple and Steve Jobs his ‘Think Different’. Not technology, but emotional intelligence has created the strongest democracies, economies, and brands in our collective history.

With one exception: energy. Civilizations progress is historically linked to energy innovation, which I like to call Energy Democracy. Every leap in energy efficiency and effectiveness has also constituted a leap in real, societal progress, with that more figurative kind of good energy. While America falls behind, China has now taken the lead on green energy innovations (even striving for de-carbonizing), with Europe in second place. Yet Europe does lead the mindful, civilized new figurative energy movement, which gives it a clear edge.

And despite recent hiccups, these two superpowers are forced to find each other in these trying times, as they have been doing for about 2,500 years now already. Who knows, maybe it could even save Taiwan. Fingers crossed.

Insight 11 — This New Tool Won’t Come to Life Just Yet

And that seems to be what everybody is doing with AI: keeping their fingers crossed. Will it give those returns? Can the stocks go even higher? We’re all standing here, looking at that little AI ball bounce in the roulette wheel. 

Of course, I’m aware of its power. And that AI in some circumstances, can be a real positive game-changer already. Science gets a boost. Healthcare too. Professions change. Internet search too. Yet, as always with all new tech, it won’t replace most existing things. That’s the tech religion, which almost never proves true. Provided we regulate it well, an AI evolution begins after the bubble bursts. 

Or am I wrong about it all? Will AI be the singularity, the ultimate achievement of humanity? When it finally comes to life? From Plato’s Cave to Pinocchio to IRobot to Commander Data, humanity has always projected itself onto tech: what if our tools are alive? Viewed this way, the timing of Guillermo del Toro’s new film Frankenstein is just a little too fishy. I smell a Hollywood conspiracy.

All jokes aside, this tech-thing has always been our fascination. It has fueled storytelling through the ages. And that’s understandable. We owe so much to our tool development that we often forget what really propelled us forward: our ability to imagine the tool in the first place. That imagination has its origin in emotion, and it is our one true achievement at the protos.

In their hubris-filled attempt to take this imagination away from us, and their belief system that an AI is even be capable of doing that, in my opinion we are seeing the techbros fly too close to the sun right now, with the end result of a bubble that is about to burst. The wording… the valuations… the hyped promises… we’ve seen this behavior before. And it’s all too human. As such, it doesn’t take a poker player to know that the bluff is about to be called.

So, despite their valiant attempts, I don’t see the tech bros becoming Dr. Frankensteins just yet, throwing lightning through their new beast, and letting it come to life. The Godfather of AI Geoffrey Hinton himself even reluctantly agrees with me on that. He believes in AI ‘awareness’, although never really admits to it, except in some alluding remarks that can be interpreted either way. 

I love the guy, he has his heart in the right place. Yet even if I’m wrong and he’s right, as so many before him, the projection of ourselves on tech is what is most damaging. Although… he himself seems ‘aware’ of that too, pardon the pun. Because he stops short on imagination. While its precisely that imagination, the ability to make new connections, that is ultimately needed to make that current revolutionary promise of AI come true… 

The Best Storytelling Wave You Can Catch

Of course I don’t have a monopoly on truth here. I could be deeply wrong indeed. Eat my words and my shoe. But I do know in my heart, I have my priorities straight: a laser focus on human, emotional intelligence. That’s where I know success lies.

I also know that everyone who has gotten this far into this article has like me, seen too many low vibrations around AI and Silicon Valley of late. They’ve seemed to have lost the plot. This illusion of control… this constant need for it… the more I look at it, the more desperate they seem. And I’m not alone. The guy from The Big Short? He’s just hedged a billion against NVidia and Palantir. 

Yet if you’ve come this far in the article, you’ve probably seen even more than just all this betting: a very different world on the horizon. One that doesn’t need to rely on broken promises and illusions. One that might actually be sparked by this AI-desperation. So, thank you for coming this far, and indulging me on these thoughts.

Also, your bottom line likes to thank you as well. Patagonia has no retention or recruitment problem. Sephora can barely keep up with its diversity-driven growth… You’re catching my drift. Tech development is usually cool. But the market? It currently demands emotional intelligence, not artificial. Last time I checked, business existed to fulfill market needs.

All those billions… how much rainforest could we have saved with that? How many social initiatives could we have built, with tens of percentage points of revenue growth? How much better and more trustworthy would your brand story be? With your revenue rising to boot?

So, whether it slowly deflates or bursts all at once, it’ll be much, much more than just an AI bubble that’s bursting. It’s a shake-up on a humanity level that is coming for us. AI is just the trigger of a shift much longer in the making: a shift away from burnout-fueling efficiency drives, into a more effective human drive. That’s what your entire storytelling should revolve around right now. That’s the space in which you don’t have to inflate your own profit bubble. The space where you’re keeping it real.

Play your cards right, and you can ride that wave into quite the success, I imagine.

Once, in his less cocaine and ketamine addicted times, Elon Musk said: “We shouldn’t summon the demon.” Did he perhaps mean the monster in his own head? Because right now I don’t see Frankenstein’s monster awakening just yet. And so, that leaves me to finish with the legendary words of interaction designer and my good friend Anton: “That LLM is just a big ol’ calculator for language.”

Pretty expensive calculator, man. Pretty expensive…

Luv, as always.

Rogier

And check out my latest book here: The Whole Story — The Ultimate Guide to Storytelling.