The AI hype is collapsing faster than the bouncy house after a kid’s birthday. Nothing has turned out the way it was supposed to.

For a start, take a look at Microsoft—which made the biggest bet on AI. They were convinced that AI would enable the company’s Bing search engine to surpass Google.

They spent $10 billion dollars to make this happen.

And now we have numbers to measure the results. Guess what? Bing’s market share hasn’t grown at all. Bing’s share of search It’s still stuck at a lousy 3%.

In fact, it has dropped slightly since the beginning of the year.

What’s wrong? Everybody was supposed to prefer AI over conventional search. And it turns out that nobody cares.

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What makes this especially revealing is that Google search results are abysmal nowadays. They have filled them to the brim with garbage. If Google was ever vulnerable, it’s right now.

But AI hasn’t made a dent.

Of course, Google has tried to implement AI too. But the company’s Bard AI bot made embarrassing errors at its very first demo, and continues to do bizarre things—such as touting the benefits of genocide and slavery, or putting Hitler and Stalin on its list of greatest leaders.

So it’s no surprise that many people are now doing searches at Reddit or TikTok, instead of conventional search engines. This could have been Bing’s great opportunity, but instead its AI bot is turning into the next Clippy.

Consumers don’t want grotesque AI responses filled with errors and outrageous claims. Who could have guessed it?

Microsoft’s Clippy

The same decline is happening at ChatGPT’s website. Site traffic is now shrinking. This is always a bad sign—but especially if your technology is touted as the biggest breakthrough of the century.

If AI really delivered the goods, visitors to ChatGPT should be doubling every few weeks.

This is what a demand pattern for real innovation looks like.

How key innovations grew (source)

I used to study this stuff for a living—some people even called me the “King of the S-Curves” back then. (Hey, I’ve been called worse.)

As you can see, a real tech breakthrough grows at a ridiculously rapid pace in its early days. Look at how fast people adopted radio or the smartphone or electricity. And these required huge investments by consumers.

But they’re giving AI away for free at Bing—and it’s not growing at all.

This is not how consumers respond to transformative technology. The current demand pattern resembles, instead, what we would call a fad or craze.

And this is just one warning sign among many.

Everywhere we look, the situation is the same.

A huge amount has been invested into AI but consumers aren’t taking the bait. They’re treating it like those America Online startup disks in the mail.

Bingo!—straight into the trash.

Who is buying all those AI-written books? Who prefers AI-made songs to human music? Who wants to rely on AI journalism to keep up on the news? Who trusts AI in any mission critical job?

I don't know anybody doing this.

“This is not what real innovation does....The current demand pattern resembles, instead, what we would call a fad or craze

On the other hand, I see plenty of people relying on AI for scamming, spamming & shamming. Those are the real markets.

Here are some other recent cracks in the AI story.

With every passing day, OpenAI looks more like Napster or the many defunct piracy platforms—it relies on the creativity of others to make a buck. And there are plenty of laws against that.

Now let’s look at places where AI has been successful.

“The only areas where AI delivers the goods are spamming, scamming & shamming.”

Of course, much of this could have been predicted months ago.

Back in February, I wrote about the total meltdown of Bing AI—when over the course of 72 hours it did the most alarming things, including fall in love with a New York Times reporter and try to get him to break up with his spouse.

That lovely moment when Bing AI was asked if it were sentient

And now, six months later, we can see that the real tech story of 2023 is NOT how AI made everything great. Instead this will be remembered as the year when huge corporations unleashed a half-baked and dangerous technology on a skeptical public—and consumers pushed back.

Here’s what we now know about AI:

  • Consumer demand is low, and already appears to be shrinking.
  • Skepticism and suspicion are pervasive among the public.
  • The AI activity is all happening inside the supply chain, where it’s hidden from view.
  • There’s a good reason why companies using AI typically try to hide that fact—because they’re aware of the backlash and resistance. AI is like genetically-modified foods, which are invaribly forced upon an unwilling public.
  • So corporations will fight to avoid disclosure. The sense of shame is pervasive.
  • Meanwhile the areas where AI has been implemented make clear how poorly it performs.
  • AI potentially creates a situation where millions of people can be fired and replaced with bots—so a few people at the top continue to promote it despite all these warning signs.
  • But even these true believers now face huge legal, regulatory, and attitudinal obstacles
  • In the meantime, cheaters and criminals are taking full advantage of AI as a tool of deception.

Is this going to change any time soon? Far more likely, the situation will get worse on all these fronts.

All these many warning signs (and, as you see, there are dozens of them) will be ignored by true believers, who have total faith which overcomes doubts and contrary evidence. In this regard, they’re much like UFO cultists—who also never waver in their creed, despite the embarrassing fact that their extraterrestrials never actually appear in public. The similarity is no coincidence. In both instance, people of a certain predisposition (I will let you define it) have embraced a higher power—and that has always been a matter with a large dose of faith involved.

Of course, the best move now would be to put the genie back into the bottle. But that’s probably not possible. So watch out for the next chapter in this unfolding story.

We’re only a few months into the AI revolution, but it’s already an ugly tale. The only thing I haven’t figured out yet is whether it’s a comedy or a tragedy.