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AI First with Adam and Andy: Inspiring Business Leaders to Make AI First Moves is a dynamic podcast focused on the unprecedented potential of AI and how business leaders can harness it to transform their companies. Each episode dives into real-world examples of AI deployments, the "holy shit" moments where AI changes everything, and the steps leaders need to take to stay ahead. It’s bold, actionable, and emphasizes the exponential acceleration of AI, inspiring CEOs to make AI-first moves before they fall behind.
Adam Brotman (00:00)
I do think we are in a bubble, in the sense that there is a poppable thing here. I'm not talking about stock prices and all that kind I'm just talking about the amount of economic activity for our society, the stock market, GDP, jobs, a lot rides on what's going on in this area.
Andy Sack (00:20)
This is AI First with Adam and Andy, the show that takes you straight to the front lines of AI innovation and business. I'm Andy Sack and alongside my co-host, Adam Brotman, each episode we bring you candid conversations with business leaders transforming their businesses with AI. No fluff, just real talk, actionable use cases and insights for you.
Greetings, everyone, and greetings, Adam. Today we're going to be talking about are we in an AI bubble? we don't exactly know what we're going to say, but we're going to attempt to answer that for you all. Adam, why don't you tee us off first?
Adam Brotman (01:06)
Okay. Uh, for some reason, I feel like we need to say this is not financial advice. Um, for some reason when you talk about this, but let's talk about the topic of an AI bubble. What I would say is.
The short answer I would say is yes, we are in a bubble. I just don't know if it's a very small bubble that's going to become a very big bubble that's never going to burst because this is humankind's last invention, et cetera, et cetera. There's a very real case that says there's insatiable demand for, I mean, we heard it this morning from Lisa Sue at AMD. We hear it from Google.
They every Nvidia, it's like every chip they can put into a data center to host and train AI is being used in the bottleneck way, actually the energy, not the chips and not the demand. so if there's a very solid argument that says, you know, this is, this is much more real than the.com situation. It's much more near term. The.com situation ended up being very real, but it was like.
It was a bunch of inflated and dark fiber and a bunch of stuff and pets.com. And then it came back and became like the most transformative invention in our lifetime, which is the internet. Um, even more than computers, all those built on computers, it's maybe the same thing in this case. It feels like it's bottoms up its demand led. It's like, it's, and it's somewhat more significant, like in terms of its, its potential immediate impact. But I still say to your question.
maybe to try to be provocative and turn it back to you. I do think we are in a bubble, in the sense that there is a poppable thing here. It's not like, I'm not talking about stock prices and all that kind I'm just talking about the amount of economic activity for our society, the stock market, GDP, jobs, a lot rides on what's going on in this area.
And so that makes me nervous. What's your thought?
Andy Sack (03:10)
I mean, I understand your articulation on both sides. Are we in a speculative bubble? Somewhat, yes. But I think the real, I think both you and I believe that this is,
underhyped, not overhyped in terms of people's understanding of what this alien intelligence is capable of. I think that the rate of adoption bottoms up and usage has exploded the fastest, you know, in ways that never before in history. And then today, Eric Schmidt came out with the saying that, you know, a society, we've
stumbled upon the invention of fire or electricity. And, you know, should we be investing in that and rolling that out? Like, of course. And so I tend to think that we're less than a bubble, despite the fact that there's never been investment like this.
society in an invention ever before. I just think that the spoils are larger. A lot of the infrastructure for AI, meaning the internet was laid over the last 30 years. And so I sort of come down on the side of like, yeah, there's going to be a significant drawdown, but this technology is very real underhyped and there's less bubble-ish than CNBC and some of the
some of the naysayers are saying. And I think that the impact to our society, including jobs and labor, we're at the very early innings of, and we haven't even really seen that yet. And so when looking ahead in 2026, I think that's going to come. So that's where I come out.
Adam Brotman (04:52)
Yeah, that's a good way to articulate it. In other words, I think we're saying the same thing. Let me say it a different way. What I hear us both saying is it is actually almost under-hyped, we believe it's almost under-hyped in terms of where this is going. Like if you really get your head around.
Andy Sack (05:15)
and how
profound of an invention it really is.
Adam Brotman (05:19)
interestingly enough, like even before you get to like, like, you know, the biggest things that could happen in terms of productivity and disinflation and, and breakthroughs that can happen from this technology, just the sheer usage numbers are astounding. And, and there, I mean, today, like the demand from
individuals and corporations and students and, and, and, and of this technology that is continuing to improve that they, they, they all this investment's going into that part to me doesn't feel that part doesn't feel speculative. In fact, we're both saying, no, that feels like it's going to continue for a while. We're not even close to like a plateau in every part. However, whenever what half a trillion dollars of infrastructure investment in
in what a year, the number for 20, it's a half a trillion of infrastructure investment for next year. And as I understand it amongst the hyperscalers and, and, and when you think about like all that's riding on that investment working out and not stopping in terms of economic activity, it, and combined with the fact that there's a lot, you know, it is, it is disrupting society in certain little
little but progressively more important ways even now, like it makes you nervous, right? There's like, there's a part of, so I think that's the thing that we're both saying is that it's, it is, there are elements of what are happening and it seemed like they're happening very fast. And that's, and that makes, that makes us nervous and it causes some issues potentially because of the speed with which this investment is happening. I mean, how, and how fast valuations are going up and
And the amount of reliance of society on this working out has gone up. It feels too fast. And at the same time, you and I are living in this world where we're like, the actual adoption is happening fast and the profundity of the technologies is that big. I don't know if profundity is actually a word, but I'm going to use it anyways. It's that significant. and so I think that's why they're both true at the same time in a way, right?
Andy Sack (07:29)
Adam, let me ask.
Adam Brotman (07:33)
I don't know if I'm saying it right.
Andy Sack (07:33)
Yeah, yeah,
yeah, I mean, let me ask you a question. Is there something that would happen in the market that would go, yeah, we're in a bubble? Like, what would happen, or what's the biggest indication that we are in a bubble?
Adam Brotman (07:47)
You know, that's a good question. I don't like when there's such a, I'll call it a reliance on...
like, truth points that if they aren't met right now,
that somehow what's going on is undeserved from a stock price or investment or.
valuation So for example, when I read that MIT study that we talked about, I actually heard yesterday that people are still quoting that MIT study a lot in society. And I really
Andy Sack (08:17)
Yeah, I saw it today. And just for the record, the
MIT study that we're talking about is the one that said 95 % of AI implementations in enterprises are failing and not meeting ROI. That's the study we're referring to.
Adam Brotman (08:31)
Yeah.
So I don't, and I feel it was a study that was not, A, was not rigorously conducted in a way that I agreed with. B, I didn't think it was extremely well written. And C, there was actually some stuff in that study that actually makes the case of how, how significant and powerful the technology is for enterprises, for example. And yet, and yet the headlines, the headlines not only missed that point, but my point to answer your question is.
The fact that like some, my opinion, misguided research report and this almost like misunderstood research report could have affected markets like it did. And it continues to be like a poster child. Like that makes me nervous. Like those kinds of things make me think that that feels bubbly because it's like, well, is it that fragile like some report.
one way good or bad, was a Wharton report that came out, as you know, last week that had the opposite conclusion, right? That said it was 90 % of corporate America was not only using AI regularly, at least once a month, but also seeing positive ROI, unless single digit numbers were seeing no ROI. And so like, was like the opposite report, right? And so I'm like, whatever, like battling reports, I actually believe in the Wharton report and the methodology more than the MIT one in this case.
But that doesn't matter. that we're in a situation where something Sam Altman says on a podcast with Brad Gerstner or some random MIT report that could affect markets. means the markets are frothing around something they don't fully understand and doesn't feel solid. those are signs. You asked me, what are the signs that went above all?
in the meantime, the numbers don't lie, right? What are they saying? Squarks like ball don't lie. Like it's, it's like, the numbers are solid in terms of usage, in my opinion, in terms of demand. And so that's why there's this mixture going on. What would, what would make you think?
Andy Sack (10:33)
I mean, I'm reminded of, I don't know if this is true, but I'm reminded of Web 1 and the internet days. And I don't know if it what popped the bubble. I don't know what popped the bubble. It's actually a good deep research report for ChatGPT. But I think I'm reminded of pets.com and that sock pet. And they were going to go public. And I don't think they got out. But I think the rate of
the number of internet companies, anything with a dot com that were going public and then they'd go public and have insane valuations. And really the moment of the bubble was pets.com and that sock pet. And I don't.
I don't see that in AI. We haven't yet seen the consumer. There's ChachiBT. There's the video, both from Gemini and from ChachiBT. But I don't see the consumer bubble component of AI. This is like a infrastructure AI. And there's a lot of usage.
of around these six LLM companies. And so I don't I come down at the end of the day that yes, it's an insane speculative bubble, but it's not a dangerous bubble. It's just an it's a good bubble in that regard. And there will be bumps. But it's it's significantly different in my mind, because we don't have the consumer bubble component. And we don't have and we have real usage by
Adam Brotman (11:49)
Thank you.
Andy Sack (12:02)
a billion. Yeah. So that's where I come out. think in general, we lean on the side of like, it's probably some high. There's some over investment maybe, but it's probably a good bubble in that regard. we're we're not frothing at the chops saying,
Adam Brotman (12:03)
Yeah. Is that, they, yeah.
Andy Sack (12:21)
my god, the sky is falling.
Adam Brotman (12:23)
nor are we like, man, you know, push everything in. It's like, long-term. would long-term. highly believe in this, but I, I'm, there's a little nervousness we both would have about like how fast some of these valuations and some of these dollars are going in, but I'm with you. Like, I feel like it's under hyped in the mid, in the midterm usage. And so therefore it's different than the.
We'll see.
Andy Sack (12:46)
All well, this was not investment advice anyway. It was just our comment on, we in a bubble?
Hopefully some of that commentary was helpful to you. Thank you to the audience for listening to AI First with Adam and Andy. For more resources on how to become AI First, you can go to our website, form3.com, download case studies, research briefings, executive summaries, and join our email list. In addition, we also invite you to connect with our AI First community, a content hub, and network for leaders AI hype into action. We truly believe you.
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