Category: Business

And yet more thinking about AI

Carl Setzer1 Comment
person reaching out to a robot

This morning, I read a LinkedIn post by Bryan Creely, who writes about career management and job hunting. (I highly recommend his work, btw).

I feel that this quote summarizes the whole thing:

They spent the last 3 years scaring us into believing we were about to go the way of the dinosaur.

And now they’re walking back that narrative and beginning to rehire for roles they eliminated due to AI.

That’s what pundits do, prognosticate, then shift, following the zeitgeist where it leads. That’s the case with AI. When they were selling AI to corporations and investors, it was all about replacing workers. That most jobs were going to be replaced by AI. But, anyway, as I expected, AI’s costs turned out to be more than estimated. I believe the abrupt rise in costs caught many companies completely off-guard, though I don’t think it was hard to predict. I wasn’t exactly right on my reasons, but I expected that token costs would have to go up. So, yay me.

Not too surprising, but we haven’t heard these pundits acknowledge their error or overestimation. Yet they are quietly walking back a lot of the hype. Better than a bursting bubble, though I’m not sure we’re out of the woods on that possibility yet.

One additional thing: I think those hyping AI were stunned by the way the public went negative on them. They seemed truly stunned by crowds of college grads booing them, by protesters at hearings for proposed data centers, and by the bipartisan nature of it all. But, really, your messaging leaned on the redundancy of most of the working population, and not-so-subtly hinted at mass unemployment and other such things. Add in electricity costs, and how the price increases are being pushed onto the communities these things are in, environmental costs, and it is so obvious that this was going to be the outcome.

So, it makes me feel better that we’re stepping back some from the irrational exuberance before this thing exploded. Yeah, I’m not convinced we’re free of the bubble collapsing, though my hope is that it’ll gently fizzle and deflate. I can be hopeful, after all.

Let me end with this comic from Pascal Bornett.

Are we nearing the end of AI’s hype cycle ?

Carl Setzer3 Comments

I just watched this video and it got me thinking about the future of tech. One of the key things they point out is how many of the AI prognosticators are now so walking so much of it back. Companies are hiring back some of those laid off. The drive to push everyone into using AI for everything is hitting up against costs, as tokens are no longer free, or subsidized. Anyway, check it out! It’s only about 10 minutes long.

I’ve written about AI before, and about how the current costs are not the true costs. That much of the operational costs of AI have been underwritten by investors. And that’s not tenable. I’ve been seeing more and more articles about these costs being passed long to users. I’m seeing companies burn through yearly token budgets in the first quarter of the year. I’m seeing companies pull back on the requirement to use AI. Yeah, the hype seems to be waning.

So, are you seeing the same signs? Let me know what you’re seeing.

Power lies not in control, but in connection

Carl Setzer1 Comment

I found the above image on Pinterest

In today’s world, so many in power are about controlling and manipulating others in order to get solely what they want. The powerful exploit, and the masses lose. Exploitation is not sustainable. One-sided economic growth is not sustainable. This leads, eventually, to collapse. I’ve long believed there’s another way.

Create a sustainable system, one that does not rely upon exploitation and the poverty of many. One that builds others up, that helps people grow. One that’s creative, not extractive. I’ve often simply called this “long-term focus”.

Leadership within this system would understand how people are motivated and how to use that knowledge to help them be the best people they can be. That’s how I see it, at least.

My hope is found in like-minded people, working towards these goals. And there’s great power in hope, don’t you think?

Considering “Amazon Dethrones Walmart as World’s Biggest Company by Sales”

Carl Setzer
a woman making a business presentation

Bloomberg posted an interesting economic update: “Amazon Dethrones Walmart as World’s Biggest Company by Sales“. I saw a few of the comments on this post about how this news spells the end of brick-and-mortar retail. But this is not quite “apples to apples” (Amazon vs Walmart). When we factor out AWS sales from the overall revenue, Walmart eclipses Amazon by $125.2 billion (Walmart = $713.2, Amazon at $588 billion in retail sales). So, I think the jury’s still out on the notion that Amazon is going to completely displace brick-and-mortar retail.

The more important story, from a business sense, is that Amazon, with its wider business model, is more resilient to economic shocks. In the end, I think the real story is which business is more resilient. And I see that lead going to Amazon.

The Destructive Power In The Drive To Monopolization

Carl Setzer2 Comments
monopoly board game on brown wooden table

I came across this article this morning on LinkedIn: My 2-year-old gave up his seat on an American Airlines flight. Where’s my refund! It’s a perplexing and bewildering series of responses by American Airlines’ customer service team. TLDR: John Bailey paid for a separate seat for his 2-year-old grandson, as required a federal law. An American flight attendant had the child give up their PURCHASED seat in order to accommodate another passenger’s comfort, with the airline then refusing to refund the purchase with a bewildering series of nonsensical responses. (Side note: I’m quite confident that these responses were AI Slop.) Resolution finally happened when the purchaser filed a complaint regarding the illegal request for the child to sit in the grandparent’s lap (federal law REQUIRES children over 2 to have their own seat. Something the airline kept overlooking…or not caring.

I see this as a classic case of Cory Doctorow’s “enshittification“. As airlines slide towards monopolies and competition collapses, they have no incentive to provide quality service. The monopolization and concentration of power is exploitive and destructive, as this case highlights.

Enshittification is, supposedly, more of an internet-based phenomenon. Monopolization has a wider impact, though. And both need to be addressed to move us towards a just and equitable future.

A Critique On AI Hype

Carl Setzer8 Comments
hand of a person and a bionic hand

AI is seemingly everywhere right now, and I’ve written a bit about it before. As I’ve started diving more deeply into it, I see all the hype about how AI will be disrupting work. Well, I’ve developed a somewhat contrarian viewpoint to the prevalent viewpoint of “AI taking over everything”. Here are a few random thoughts on the whole thing right now.

A lot of what AI is replacing now, and expected to in the near future, runs on the assumption that it will remain (nearly) free. However, most of the current costs are funded by investor dollars. As MIT recently reported, 95% of AI initiatives are failing to generate value. So, the only way companies are gaining value from AI is via its low cost. And the operating costs are significant. Data centers are expensive, both to build and to operate. GPUs aren’t cheap to buy. The environmental costs are steep. And, right now, those costs are being paid from investor dollars. When those dry up (investors need to make a return on that investment at some point, and that needs to be greater than the investment as well as the current operational costs. I expect the point when investors stop feeling FOMO and start worrying about making a return will be coming soon. I expect that when the costs become the responsibility of the consumer, the price will escalate abruptly and steeply. Will a junior developer really be displaced by ChatGPT or CoPilot? Or will we suddenly find junior developers much more cost-effective?

Adding to this, I’ve seen discussion about how AI infrastructure investment is potentially masking a recession. Thus, I’m concerned that we’re missing the weakening economy, things like continued tech-sector layoffs, and are not paying attention to some big economic weaknesses. If AI investment dries up, and layoffs start compounding, the dominoes start to fall, and that brings a significant recession/depression. Which will muddle this significantly.

Anyway, I think that we are in a bubble regarding AI. Like the Dot Com bubble, I think that AI will herald significant technological changes. AI is a powerful tool, and will continue to be so. However, I am confident that the techno-dystopia predicted by AI hyper-meisters will not materialize. I’m not sure we can even conceptualize what it will look like at the end of this cycle. But I am confident that those who have mastered AI will benefit greatly from the coming revolution. There are opportunities, and now is the time to make the investment in understanding them.

Seth Godin’s “The Use (And Design) Of Tools”

Carl Setzer1 Comment

As I read Seth’s post today, I started wondering how tools like AI can be impacted by, or actually impact the attitude of “Too Busy To Learn”. I think one of AI’s key potentials is to make the need to understand the tool’s operation non-essential (think coding).

Mainly, I think the future will be dominated by those who understand the tools, not by the people who can simply operate them.

Recommended Reading: In search of kindness by Richard Branson

Carl Setzer
Richard Branson and Eve

Richard Branson is a leader I’ve looked up to for years. And his recent blog post adds to that:

In search of kindness – Richard Branson

I deeply value the idea of “look for the best in people”. And how that leads into “…embrace failure as essential to our journey…”. If you want people to push boundaries, to innovate, you need to accept that failure will come of it. Build processes that maximize the learnings from that. Then move on.

One idea I’ve held for years is simply “it’s more powerful to build people up than to tear them down”. This mindset doesn’t seem to be highly valued right now, but I think that it holds true. And it is how I lead.

Some Thoughts On TikTok

Carl Setzer
pexels-photo-1092671.jpeg

The Law of Unintended Consequences again applies as the US Government is preparing to ban TikTok for data privacy and security concerns. I expect the expectation was for all those TikTok folks to just bop over to Instagram, Facebook, Threads, or X, but that doesn’t seem to be the case. At least, it’s not as simple as that. It looks like many Tiktokers are migrating to “RedNote”, the Chinese answer to TikTok. So now we’re playing a game of whack-a-mole. Fun.

As wiser people than me have pointed out, a TikTok ban will not do much of anything in terms of security and data privacy (here’s a good piece on that). These sorts of things happen when legislation is crafted by people who don’t understand the technology they’re trying to regulate. Anyway, I understand there’s the possibility that the Supreme Court will weigh in on this, so I guess there is a slight possibility that this ban be halted, but I’m not holding my breath. So, it’ll be interesting to see how the policy implications shake out. I doubt anyone has a solid grasp on how this will ripple out.

With this, I know some folks whose businesses are highly dependent on TikTok who are scrambling to work their way through this. As I’ve written before, you should NOT set your business up highly dependent upon a single platform you can’t control, or have little to no influence with. I always recommend driving people to a website that you are in control of, and then having them sign up for a newsletter. Email lists are very portable, as are website signups. If you can email even 70% of your followers, something like a TikTok ban becomes less life-threatening to your business. Keeping the risks your business faces in mind is crucial for sustainability.

2025 is shaping up to be a very dynamic year for business in the digital realm.

Ernst & Young, Meta, etc, firing folks for misuing benefits

Carl Setzer
woman organizing her belongings

The past few news cycles have featured employees being fired for misusing benefits. Whether we’re talking about EY letting people go for cheating on required education, Meta letting folks go for misusing meal benefits, companies seem to be more willing (eager?) to let someone go. I think this is related to the calls for a return to office, which some feel are about encouraging staff to resign and, thus, not receive any severance, etc.

So, what I think we’re seeing is companies looking for ANY excuse/reason to let people go. So, I would be cautious, very cautious, about giving them such. Be thoughtful and be wary.

Think I’m on to something? Or am I just paranoid? Let me know what you think.