Companies are about to waste billions on AI

“It’s venture money, not adventure money.” That was the loving response a dear friend once got from a VC while pitching an idea. But when we are in the hype cycle phase of a new technology, that caution goes out the window. VCs, after all, have to deploy all the capital they raised, and the cost of missing out on something big is higher than the downside of swinging and missing, especially when everybody else is taking the same swing.

A similar dynamic plays out inside most companies — and the technology of the moment is AI and anything remotely associated with it. Large language models (LLMs): They are AI. Machine learning (ML): That’s AI. That project you’re told there’s no funding for every year — call it AI and try again.