“But this sort of grandiose idea-mongering leads to the risk of ego-driven BIPs (Big IT Projects) which have historically ended in failure, if not disaster. “Technology will revolutionise public sector productivity” is all too often a promise akin to “we’ll close the deficit by cracking down on tax avoidance” — it’s what you say when you don’t actually have a solution.” – How Should You Invest Around the AI Bubble? – Bloomberg (July 9th, 2024)
The tagline of the above article by John Stepek was, “AI will cost a lot to build out, and, even then, it may not pay off. What does that mean for investors?”
What is worth noting – and thank you to Tom Craig for bringing the Bloomberg article to my attention, are my earlier postings in which I talked about how there is an eerily familiar sense to the VC-hyped AI miracle that was the earmark of the dot.com bubble burst.
Ready To Pop
In response to Tom’s LinkedIn post, I wrote the following:
When you use the term “overhyped bubble,” Tom, you remind me of one of my most recent posts, in which I said that the conditions are eerily similar to those that occurred when the dot.com bubble burst.
Specifically:
⚠ Too many solution providers in the market, e.g., Solution Map Migrain
⚠ VC money being somewhat blindly thrown at anything AI.
⚠ The resulting focus from serving end-client needs to achieving quarterly revenue targets
⚠ The seeming proliferation of “professional managers” with little experience or expertise in the industries, their solution is designed to support heading up companies.
⚠ And the BIG ONE – Gartner‘s report that 80% of all AI initiatives are failing
Against this backdrop, Tom asked, “What does it say and mean for supply chains, logistics, and transportation? Jon W. Hansen“
Avoiding The Fallout
I wrote a series of articles starting last year about the importance of looking behind solution provider logos to see who is running the company and for how long. Here are a few of the titles starting in 2023:
➡ A logo on a map or a quadrant ➡ A fancy press release announcing a big client win ➡ A features, function, and benefits sheet ➡ A ChatGPT-generated email about how great they are as a provider ➡ A social media “preaching to the choir” post that is usually only liked by the solution provider’s family, friends, and employees
The above exemplifies a company I might feel good about recommending.
Another company is Zycus. In 2009, I was told they bought back the company from a VC because they wanted to focus on serving the best interests of their clients. Like SDI, Zycus is privately owned.
By the way, the current CEO also founded the company in 1998.
Are you starting to see a trend here 😉
I won’t list the ones my research has flagged, but now you know what to look for in a provider beyond the glossies. I can provide my research on specific companies on request.
Procurement Insights
Why does Goldman Sachs’ head of global equities agree with me about the “Overhyped AI Bubble?”
Posted on July 9, 2024
0
“But this sort of grandiose idea-mongering leads to the risk of ego-driven BIPs (Big IT Projects) which have historically ended in failure, if not disaster. “Technology will revolutionise public sector productivity” is all too often a promise akin to “we’ll close the deficit by cracking down on tax avoidance” — it’s what you say when you don’t actually have a solution.” – How Should You Invest Around the AI Bubble? – Bloomberg (July 9th, 2024)
The tagline of the above article by John Stepek was, “AI will cost a lot to build out, and, even then, it may not pay off. What does that mean for investors?”
What is worth noting – and thank you to Tom Craig for bringing the Bloomberg article to my attention, are my earlier postings in which I talked about how there is an eerily familiar sense to the VC-hyped AI miracle that was the earmark of the dot.com bubble burst.
Ready To Pop
In response to Tom’s LinkedIn post, I wrote the following:
When you use the term “overhyped bubble,” Tom, you remind me of one of my most recent posts, in which I said that the conditions are eerily similar to those that occurred when the dot.com bubble burst.
Specifically:
⚠ Too many solution providers in the market, e.g., Solution Map Migrain
⚠ VC money being somewhat blindly thrown at anything AI.
⚠ The resulting focus from serving end-client needs to achieving quarterly revenue targets
⚠ The seeming proliferation of “professional managers” with little experience or expertise in the industries, their solution is designed to support heading up companies.
⚠ And the BIG ONE – Gartner‘s report that 80% of all AI initiatives are failing
Against this backdrop, Tom asked, “What does it say and mean for supply chains, logistics, and transportation? Jon W. Hansen“
Avoiding The Fallout
I wrote a series of articles starting last year about the importance of looking behind solution provider logos to see who is running the company and for how long. Here are a few of the titles starting in 2023:
Looking Behind The AI Oz Curtain
Here is an example of what my research to this point tells me about some companies – although there is still a little more research to be done:
Did you know that Carmen Castillo has been at the helm of SDI International Corp. since its founding 31 years ago (1993)?
For me, this is more impressive than:
➡ A logo on a map or a quadrant
➡ A fancy press release announcing a big client win
➡ A features, function, and benefits sheet
➡ A ChatGPT-generated email about how great they are as a provider
➡ A social media “preaching to the choir” post that is usually only liked by the solution provider’s family, friends, and employees
The above exemplifies a company I might feel good about recommending.
Another company is Zycus. In 2009, I was told they bought back the company from a VC because they wanted to focus on serving the best interests of their clients. Like SDI, Zycus is privately owned.
By the way, the current CEO also founded the company in 1998.
Are you starting to see a trend here 😉
I won’t list the ones my research has flagged, but now you know what to look for in a provider beyond the glossies. I can provide my research on specific companies on request.
30
Share this:
Related