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Wheneven Sam Altman thinks there is an AI bubble, then there most likely is an AI bubble. But its even worse than that. There isnt just one AI bubble: there are three. First, AI is almost certainly in what economists call an asset bubble or a speculative bubble. As the name suggests, this is when asset prices soar well above their fundamental value. A classic example of this kind of bubble is the Dutch tulip mania of the 17th century, when speculators drove up the price of tulip bulbs to astronomical heights, convinced that there would always be someone willing to pay more than they had. As I write, Nvidia is trading at 50 times earnings, Tesla at an astounding 200 times, despite falling revenues, while the rest of the Magnificent 7 (Google, Amazon, Apple, Microsoft, and Meta) are enjoying significant boosts thanks to the bets they are taking on an AI-led future. The chances of this not being a bubble are between slim and noneand while Slim hasnt quite left town, hes booked his ticket and is packing his bags. Second, AI is also arguably in what we might call an infrastructure bubble, with huge amounts being invested in infrastructure without any certainty that it will be used at full capacity in the future. This happened multiple times in the later 1800s, as railroad investors built thousands of miles of unneeded track to serve future demand that never materialized. More recently, it happened in the late ’90s with the rollout of huge amount of fiber optic cable in anticipation of internet traffic demand that didnt turn up until decades later. Companies are pouring billions into GPUs, power systems, and cooling infrastructure, betting that demand will eventually justify the capacity. McKinsey analysts talk of a $7 trillion race to scale data centers for AI, and just eight projects in 2025 already represent commitments of over $1 trillion in AI infrastructure investment. Will this be like the railroad booms and busts of the late 1800s? It is impossible to say with any kind of certainty, but it is not unreasonable to think so. Third, AI is certainly in a hype bubble, which is where the promise claimed for a new technology exceeds reality, and the discussion around that technology becomes increasingly detached from likely future outcomes. Remember the hype around NFTs? That was a classic hype bubble. And AI has been in a similar moment for a while. All kinds of mediasocial, print, and webare filled with AI-related content, while AI boosterism has been the mood music of the corporate world for the last few years. Meanwhile, a recent MIT study reported that 95% of AI pilot projects fail to generate any returns at all. But what does all this mean for your organization? What should you be doing to respond? Do the Bubbles Matter? Bubbles are fine things in bottles of champagne, but in business contexts they are generally viewed as something to be avoided. So, when we see that AI is likely in three bubbles simultaneously, the immediate instinct may be to swerve urgently away from AI. I recommend resisting that instinct. Two of the three bubbles are largely irrelevant for most organizations and should simply be ignored. The speculative bubble is the result of a modern version of tulip maniainvestors bidding up the price of equities on the hope of future performance. The overheated valuations and crazy multiples are only problems for organizations that are involved in or directly exposed to the financial speculationand most organizations are not. A market crash may cause broader pain for the economy, but that is a potential environmental issue that all businesses will need to navigate. It should have little direct effect on a carefully planned AI implementation strategy. And as for the infrastructure bubble, well, if it turns out we really are building too much, the problem will be one of overcapacity, not overvaluation. For most organizations this is not only irrelevant, it may also lead to positive outcomes, because overcapacity will mean falling prices for those who want to use that infrastructure. This leaves the hype bubble, and this is where things get interesting. The hype bubble does have an important lesson for most organizations, but it isnt the one we might thinkeven if 95% of AI pilot projects fail, the issue here isnt that AI cant deliver value, but that many companies are approaching the technology in the wrong way. Dotcom Deja Vu Ive seen this before. I was in the dotcom boom (and bust) of the late ’90s and early 2000s. I saw Pets.com burn through $300 million before imploding, I saw the NASDAQ crashing by 78% and I read the articles by pundits who authoritatively declared that the internet was a fad. Yet during that same meltdown, Amazon was methodically building fulfillment centers and refining its recommendation algorithms. Google was quietly perfecting search. PayPal was solving payment friction. And thousands of companies were developing their first e-commerce capabilities, with greater or lesser degrees of success. The point is simple: a thing can be hyped beyond its actual capabilities while still being important (and to be fair to Sam Altman, he also makes this point in the piece quoted above). Just because AI is in a hype bubble does not mean that AI is fake news or that there isnt huge value to be extracted from it. The hype bubble simply means that some people are overexcited about AIit doesnt mean that there isnt something to be legitimately excited about. I made this argument in the dotcom era and I make it again now. What happened then will happen with AI. When valuations correctand they willthe same pattern will emerge: companies that focus on solving real problems with available technology will extract value before, during, and after the crash. In sum, companies with systematic approaches to extracting value from the technology will thrive. What becomes crucial, then, is your approach to capturing that value. So, how do you actually achieve that goal? The Value Creation Playbook The companies capturing real value follow three pillars of systematic implementation: Problem-First Architecture starts by mapping organizational friction points. Where do humans waste time on repetitive work? Where do information bottlenecks slow decisions? What processes consistently produce errors? Only after identifying these problems do successful companies consider AI solutions. Portfolio Balance means mixing time horizons and risk levels. Quick wins (one to three months) might include offthe-shelf tools for document processing. Strategic bets (3 to 12 months) could involve custom solutions for core business processes. Moonshots (more than 12 months) explore new business models. A retailer might implement an inventory chatbot this quarter while developing predictive analytics for next quarter and testing autonomous purchasing agents for next year. Holistic Integration connects AI initiatives to each other and to business strategy. Successful companies break down silos between IT, operations, and business units. They create feedback loops between projects. A manufacturing companys quality control AI feeds data to predictive maintenance AI, which informs supply chain AI. Each system makes the others smarter, creating compound value that isolated pilots never achieve. This is how you build value regardless of bubbles: systematically, purposefully, and starting today. Benefitting from Bubbles Far from being a threat, the AI bubble might be the best thing that could happen to pragmatic adopters. Consider what speculative excess delivers: billions in venture capital funding R&D youd never justify to your board; the worlds brightest minds abandoning stable careers to join AI startups, working on tools that youll eventually be able to use; infrastructure being built at a scale no rational actor would attempt, driving down future costs through overcapacity. While investors bet on which companies will dominate AI, you can cherry-pick proven tools at competitive prices. While speculators debate valuations, you will be implementing solutions with clear ROI. When the correction comes, youll also be able to benefit from fire-sale prices on enterprise tools, seasoned talent seeking stability, and battle-tested technologies that survived the shakeout. The dotcom bubble gave us broadband infrastructure and trained web developers. The AI bubble will leave behind GPU clusters and ML engineers. The smartest response isnt to avoid the bubble or try to time investments in it perfectly. It is to let others take the capital risk while you harvest the operational benefits. The bubble isnt your enemy. If you play your cards strategically, it can be a major benefactor. A valuable distraction Perhaps the greatest gift of the bubble discourse is the distraction it provides. While commentators debate whether Nvidia is overvalued and conferences overflow with AI bubble panels, something interesting happens: the noise creates perfect cover for serious operators to build lasting value. This psychological dynamic creates genuine competitive advantage. The bubble debate gives skeptics intellectual permission to waitafter all, why pursue that interesting AI project if the whole AI thing will inevitably crash? Meanwhile, companies quietly pursuing systematic AI implementation face less competition for talent, less pressure on timelines, and less scrutiny of their initiatives. The louder the bubble talk, the more space opens for those willing to take a methodical approach to building value.
Category:
E-Commerce
If theres one thing President Donald Trump cannot do, its keep a secret. Alongside saying that negotiations between the U.S. and China held in Madrid September 14 and 15 had gone well, Trump decided to tease a cliffhanger that would keep everyone coming back to his Truth Social profile. A deal was also reached on a certain company that young people in our Country very much wanted to save, he wrote. They will be very happy. That certain company is TikTok, and the smart betting is that the deal that placates both the U.S. and China could involve Oracle, the company cofounded by Larry Ellison, which this month shot up in value, making the 81-year-old the worlds richest man for a short period. Oracle was a preferred buyer in Trumps eyes earlier this year, when TikToks parent company, ByteDance, denied planning to sell the app to Oracle. Despite that, Trump said that an offer from Oracle was still on the table. (Neither Oracle nor TikTok responded to Fast Companys request for comment.) Any inkling of Ellison within the TikTok deal would be yet another major media move for the magnate, who with his son, David, recently pulled off an $8 billion merger with Paramount, putting him in ownership of the likes of MTV, Nickelodeon, and CBS News. That latter media property is a concern for some: The newly christened Paramount Skydance is reportedly in negotiations with Bari Weiss, founder of The Free Press, to become either editor-in-chief or copresident of CBS News. Weisss reporting for The Free Press has taken ideological slants that would be unusual for CBS News, which attempts to maintain an impartial, objective stance in its reporting. The Ellisonsfather and sonare now rumored to be looking to broker an even bigger deal. Paramount Skydance is said to be looking to buy Warner Bros. Discovery in a deal that would be worth more than $70 billion. Paramount and Warner Bros. would in essence become the biggest studio in the world with a formidable base of franchises that include DC Comics, Harry Potter, Mattel licenses like Barbie, Hasbro licenses like Transformers, Mission Impossible, Star Trek, Top Gun, Dora, SpongeBob, etc., wrote Barclays analyst Kannan Venkateshwar in a report last week. Alongside all those household names, theres another journalistic outlet that would come under Ellison ownership: CNN, up to now one of the biggest thorns in Trumps side. If the Warner Bros. Discovery deal were to go through, Ellison would control streaming services with a combined 200 million-plus subscribers, says Barclays (though there will be overlap between the Paramount+, HBO Max, and Pluto services). Its something Massachusetts Senator Elizabeth Warren warned against on X on September 11. The deal with Warner Bros. Discovery, she wrote, must be blocked as a dangerous concentration of power. Add TikToks 170 million-plus users and one of the hottest properties in the social space and you get to a position of dominance in the media. (Warrens office did not immediately respond to a request for comment.) It is not a sign of a healthy democracy when billionaires are buying up all of the means of cultural consumption, says Steven Buckley, lecturer in media and digital sociology at City St Georges, University of London. Others have pointed out that the potential playbook, if this were to go ahead, draws comparisons with Elon Musks takeover of a social platform to dominate public discourse. Musk has previously taken credit for helping Trump secure the White House in 2024 through his positioning of X as a supportive social network. It is naive to think that over time [Ellisons] business and political philosophy, combined with the external political pressures from this and future administrations, wouldnt have an impact on how the American public experience TikTok, Buckley says. Of course, many critics would argue that any deal is based on a false premise that TikTok needs to be American-owned outrightan issue that has literally been litigated as long back as the dying days of Trump’s first presidency. Fundamentally TikTok is not broke, but Ellison and the Trump administration are trying to fix it nonetheless, Buckley says. Any actual problems with the platform such as misinformation, harassment, etcetera are not going to be fixed simply by a change of ownership. And user privacy is certainly not at the front of this administration’s mind.
Category:
E-Commerce
Blame Ryan Reynolds. Or maybe the Trump family. Or, if we must, three beloved sitcom stars from the early-to-mid 2000s. But the recent news, first reported by Business Insider, that Jimmy MrBeast Donaldson and his Beast Industries were planning to launch their own wireless service by sometime in 2026, needs someone to blame for this harebrained idea. Way back in June, I wondered, is mobile the new tequila? Meaning, is wireless service the latest industry where a celebrity can start a company (or invest in one), market it using their face and charisma, and hope for a nine- or ten-figure exit? The short answer is (or should be) absolutely not. In this premium piece, youll learn: What a MrBeast wireless service would have to overcome to be successful Why wireless brands and celebrity brands really dont mix The six secrets to Ryan Reynolds success as a marketer that are increasingly hard to replicate How the major wireless carriers could co-opt the trend of famous people selling mobile service Were deep into the DTC, social marketing era that has seen legacy brands of all stripes get threatened by upstarts. The modern consumer is constantly craving something new. That has not only fueled these brands but also traditional players embracing gross-out marketing, superstar collaborations like the recent Oreo-Reeses team-up, anthropomorphic Nutter Butters on TikTok, and stolid middle-of-the-grocery-store staples from Kraft and Heinz (soon to be two companies again!) doing too many attention-grabbing, culture-hacking moments to count. @fastcompany Strange food combos are always a marketing hit. Brands are at it again, and our team tested some of the latest gross out foods. @brachscandy Tailgate Candy Corn and @tropicana Crunch Cereal. #brandingtips #grossout #weirdfoodcombos #eatwithme #marketing original sound – Fast Company But is wireless really the same as the candy aisle? [Photo: Roy Rochlin/Getty Images/MTV] Beast Mode You watch MrBeast’s YouTube videos and maybe even his Amazon Prime Video reality series. You eat his Feastables candy. You may even have scarfed down a MrBeast Burger before that business went bust. By you, I refer, of course, to a 13-year-old boy. Now imagine if MrBeast was also your mobile service. Donaldson laid out the logic of his expansion into consumer goods a couple of years ago, outlining that brands simply couldnt pay what it should cost to sponsor his YouTube videos as they routinely attracted more than 100 million views. So to get the value from his work, he needed to create his own brands.Donaldson already has a successful chocolate bar brand called Feastables, launched in 2022, as well as a toy brand called MrBeast Lab, and a snack brand called Lunchly. What do all those things have in common? Theyre all products targeted predominantly at MrBeasts younger audience. Theyre also all ostensibly fun. You know whats not fun? Selecting a wireless plan. So far as we know, the candy business at least is working, as its reportedly profitable and generating almost as much revenue as the media side of the business. If Donaldson werent so committed to overspending on his videos, where he lost more than $100 million last year. And for what? No idea why he had to build a maximum security prison, for example, for whats basically an episode of a game show, which is supposed to be a cheap format! If Beast could make highly profitable media, he could focus his other pursuits on growing his CPG Feastables brand, which just expanded into cookies. When Feastables bars first launched, I interviewed Donaldson, who told me that Feastables had been made so that he could enjoy them even with his Crohns Disease, which requires him to eat carefully so as not to inflame his condition. But as Beast Industries has grown, that sense of personal connection to the brands being aunched is dissipating. If MrBeast has a compelling personal story for why hes starting a wireless company, I cant wait to hear it. But a wireless service largely strays from everything that makes sense for celebrity brand extensions: Celebs thrive in such sectors as fashion, booze, and beauty in part because it’s easy for them to personalize those products and people already want to spend money on those goods. Services-based businesses carry much greater risk because people expect, yknow, ongoing service versus just delivering what you promised in a package. Celebrity products can double as badge brands, signaling your affinity for the celebrity and doubling as free marketing for everything they do. How do you even signal that youre a customer of a particular wireless carrier? Well, you could tell people, but when was the last time you heard anyone say, I love my wireless carrier? What about Ryan Reynolds, you ask? Lets break down Reynoldss success with Mint Mobile. The Reynolds Mirage Its easy to be hypnotized by Reynolds Deadpool-forged, meta-advertising approach to Mint. In 2019, he bought a 25% stake in the company, made a slew of self-aware and funny ads, its app downloads soared by 34% in the first 12 months, and the company was then acquired by T-Mobile for $1.35 billion in 2023. Easy-peasy, right? There are about as many reasons why Reynolds’ success with Mint would be near impossible to replicate, as there is why the success of Deadpool is so tough for Marvel to replicate (except with Deadpool himself). It’s currently 2025, not 2016. Reynolds was early to the game. His promotional work for the first Deadpool movie gave him a clear identity as a pitchman. In 2018, he started a marketing agency, Maximum Effort, so he had the infrastructure to produce his own ads. The Deadpool 2 campaign and his work promoting Aviation Gin (a spirit thats, well, a harder sell than tequila) allowed him to developand perfecta style that fit perfectly with his movie star persona. Reynoldss ads dispensed with the unspoken artifice of adland, breaking the fourth wall, and acknowledging it was all rather ridiculous. As he told me last year, Audiences know theyre being advertised to, so if you can acknowledge that invisible contract, its a bit more authentic . . . My feeling is always that its just a fucking commercial. Who gives a shit? Just make sure that its fun. By the time he invested in Mint Mobile, he knew exactly how to position the brand as a no BS marketer. From a delightfully lo-fi Powerpoint presentation to somehow convincing Rick Moranis back in front of the screen, it all had the air of a comedy sketch. Mint was a discount carrier, which has traditionally been the only piece of the market where a brand can break through against the major players. Because of Reynoldss marketing approach, he managed to sell cheap phone service without cheapening his own brand. Reynolds also knows when to be in your face and when to go away. After 2024s Deadpool v. Wolverine onslaught, which helped the movie be the second-largest box office smash of the year with $1.3 billion in worldwide grosses, he became far less omnipresent, a luxury that YouTubers and podcasters (and the attention-starved Trump family) cant afford. So yeah, its easy for stars (and their agents and business reps) to see dollar signs as they rush into a category like wireless. But historically, building a branded wireless service has been a tough road. MVN-uh oh Technically, MrBeast isnt actually launching a telecom company. Although I would love to see him try, just for the videos wed likely get out of it. Imagine I Built 100,000 Cell Towers in 100 Days! or Survive 100 Days Without Cell Service, Win Wireless for Life. If his mobile plans do materialize, it would be a MVNO, a mobile virtual network operator. These are brands that buy excess network capacity from the major carriers, and profit from the difference between that price and what they charge customers. For the majors like AT&T and Verizon, its a way to cash in on unused network capacity, while smaller brands get to offer up cheaper mobile plans and some brand variety for customers. In addition to Mint (before its acquisition), there have been other successful MVNOs such as Cricket and Google Fi. But the path is also littered with the graves of failed brands. Remember Ampd? Founded in 2005, the brand aimed its brand at younger people who wanted to consume content and games on their phones. (This was pre-iPhone.) It went on a full-on brand blitz, signing up MTV as a content partner, Snoop Doggs youth football league, Coachella, and more. But by mid-2007, it had burned through $360 million and declared bankruptcy. ESPN, perhaps the most powerful brand in American sports, launched its own MVNO in 2006and shut it down later that same year. This was due to a slew of factors, not the least of which was the $300 phone it expected users to buy to go with it. On a slide deck, the mobile business must look like a no-brainer: four entrenched players, no real brand affinity, not a lot of overt customer innovation. In reality, its incredibly competitive. The U.S. market is saturated. Because most people already having mobile phones, growth for any new brand largely comes from stealing users from a competitor. This is done primarily through race-to-the-bottom price promotions, but major brands like Verizon and T-Mobile are also increasingly using perks such as tickets to sports and concerts to build loyalty. What could MrBeast posibly offer to compete with these? Itll take more than a free candy bar, or even one of his massive giveaways. Although it would make sense for MrBeast to sell an entry-level wireless service given his young fan base, hed be taking a huge risk if he slaps Beast on the name. The logical move would be to call it Beast Mobile, just as the SmartLess guys dubbed their phone service SmartLess Mobile. But the best a wireless brand can hope for with consumers is not to be hated, to be fine, a utility in peoples lives. Donaldson also carries the additional burden of being MrBeast, so hes not only the face of the brand but hed be tying his personal brand to the fate of his wireless startup. Cash grab vs brand strategy Celebrity-backed brands are no longer a novelty, so their reason to exist must stem from an actual passion of the celebrity themselves. Thats the key for what we like about a person to transfer over to whatever products and services theyre hawking. When a celebrity venture feels like an organic extension of what theyre already known for, it resonates differently with consumers, Rethink New York chief creative officer Tara Lawall, who worked with the Smartless crew to launch its mobile brand, told me back in June. Millions of people listen to SmartLess on their phones, which makes mobile a natural fit for the brand. That connection sounds a bit tenuous, as people do almost everything on their phones. By that logic, everything from ChatGPT to Fortnite should have a wireless service. (Oh, please no.) Exactly no one is emotionally invested or passionate about their wireless plan, and Beast is not a good enough actor to convince anyone that he has an actual passion for the sector. Which is why a mobile brand feels like such a naked cash grab. (The SmartLess trio can more or less play the Reynolds card of making a joke out of it, and well see if that can deliver for an older audience.) These all still feel like a stretch, and are pretty clearly ventures built to be acquired by one of the major carriers, just as Mint Mobile was. So why dont we skip the middle step? Famous Wireless Verizon, AT&T, and T-Mobile should just mimic fashion brands and release their own celebrity-backed mobile plans. Think of it as a version of the McDonalds Famous Orders campaign but for wireless. Could you imagine a Taylor Swift-branded mobile plan that offered merch, ticket perks, and advance clues to her next moves? Or a Philadelphia Eagles plan? These could essentially be the same MVNO, just skinned Fortnite-style to fit different fan cultures. (Maybe Fortnite should have a wireless service?) We find ourselves in a moment when Buffalo Bills quarterback and NFL MVP Josh Allen can say, Its really about the authenticity of itnever putting my name on something that I personally dont believe in or I wouldnt use. Meanwhile, on the other side of the spectrum, there’s Sydney Sweeney who says she needs to take every brand offer in order to make up for Hollywoods shortfall. If I just acted, I wouldnt be able to afford my life in L.A., she told The Hollywood Reporter in 2022. I take deals because I have to. Both approaches can work, but what they symbolize is that celebs cant be cynical about how they monetize their brands beyond the primary source of their fame. Remember that in 2023, Donaldson and his company sued Virtual Dining Concepts, its partner on MrBeast Burger, claiming the company had taken advantage of his brand to expand rather than focusing on the quality of the food. The bulk of online reviews for MrBeast Burger outlets had less than two out of five stars, and used words like, disgusting, revolting, and inedible. Dropped calls and monthly fees are a world away from a sloppy burger. And much tougher to swallow.
Category:
E-Commerce
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