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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