Is the AI Bubble Bursting?? (The Shocking MIT Study, Key Observations from a "Gilded Age" Billionaire Summit, & a Surprise Announcement...)

This past week, I was in Newport, RI where I delivered the opening keynote at the Newport Global Summit, a billionaire investor event hosted at the Newport Art Museum, in the room you see above.

One of the highlights of the event, was getting to connect with Steve Forbes  - and to hear how my talk had an impact on his thinking.

Now, in case you're not familiar...

Newport, RI is the site referenced in HBO's hit show, "The Gilded Age" and has been a billionaire playground since the late 19th century, with many third, fourth, and fifth generation Gilded Age families still calling Newport home, with "summer cottages" like the one you see below...

And it was ironic, because in my keynote...

I referenced that like in the Gilded Age (c. 1870-1900) the vast majority of people in the United States (and much of the world) today are experiencing the greatest concentration of wealth in their lifetime.

(A trend that's been accelerated (at least partly) with the rapid ascent of AI.)

But the question is this:

In spite of this rapid AI ascent, is it possible that the "AI Bubble" is already  upon us and that it may be ready to burst??

Brand new evidence suggests that the answer is.....

Perhaps yes.

In fact, two private presentations at the Newport Global Summit - along with public data that's just been released this week - should lead us to at least question whether we may be closer to the bubble bursting than some think.

Let me explain...

1 | The MIT Gen-AI Study That Sent Stocks Reeling...

In case you missed it, earlier this week, MIT released a report through their NANDA Program revealing that 95% of Generative AI Pilots at companies are failing right now:

And in case you haven't yet read the 26-page report, here a few highlights:

• Based on interviews with 150 leaders, survey of 350 employees, and analysis of 300 public AI deployments - only ~5% of AI deployments at the enterprise level have achieved rapid revenue acceleration. The overwhelming majority of in-house AI projects are failing.
• Consumer tools like ChatGPT offer a massive boon to individuals, but they don't have the same effect at the enterprise level because they don’t learn from or adapt to complex, corporate workflows.
• The failure rate of enterprise AI projects is actually understated based on organizations' unwillingness to report their failures.

In other words, when you dig beneath the surface and take time to measure profitability, organizations at the enterprise level are not seeing the payoff that Gen-AI promises to deliver (at least not yet).

In addition...

There are several "Gen AI Myths" from the report that I think are particularly interesting to note (see below). Especially around AI job replacement and what's really holding back AI effectiveness.

Now, the release of this report coincided with Sam Altman's most recent market manipulation media tour pushing a narrative that an AI Bubble is forming (strangely on the heels of his record $500Bn private company valuation - surpassing that of SpaceX - making OpenAI the most valuable private company in history):

And it was the combination of the MIT NANDA Report and Altman's public AI Bubble assertions that sent AI (and AI-adjacent) stocks like Palantir Technologies and NVIDIA reeling earlier this week:

Stocks have since recovered on the Fed's signal of a possible rate cut in September, but the fact remains:

We are very likely experiencing AI Bubble conditions - and this extends far beyond just a few public company stocks.

Which brings us to...

2 | The Shocking Data on Data Centers.

There were two key observations from the talks at the Newport Global Summit that really stopped me in my tracks:

#1 - Venture Capital Hyper-Concentration

Right now, 65% of all Venture Capital Investment is going into AI projects. This is the greatest concentration of venture capital into any one sector of the economy that we've ever seen in history.

And the last time we saw anything close to this?

Was the 1999-2000 dot com boom.

(Right before the crash).

#2 - Data Center Over-Investment

Right now, we're seeing massive investment going into Data Center infrastructure.

In fact, check this out:

In the United States, the value of data centers under construction is on track to surpass the value of office construction as early as this year.

(Meaning, at a physical infrastructure level - we are literally replacing space designed for human workers with space designed for our digital replacements at a pace unlike anything we've seen.)

But here's the insight I found most interesting from the Newport Global Summit:

Much of this investment is going into data centers built far away from population centers, and close to power generation centers.

(e.g. locations like Northwest Texas and North Dakota).

These locations make sense for data centers built specifically for training LLM models, because real estate and power generation is relatively cheap in these geographies.

But what these locations are NOT good for...

Is supporting ongoing back-and-forth AI model interaction with end users.

(The geographic distance makes latency HIGH and interactions SLOW.)

So while these "high distance" data centers make sense for the initial training of models needed today, they're not great for the longer-term need to support back-and-forth AI interaction with users.

(Which is what will really be needed in the coming years...)

Meaning:

Just like what we've seen with vacant shopping malls and empty office space dotting the country...

There is a chance that we may be seeing a massive over-investment into soon-to-be obsolete AI real estate / infrastructure.

Turns out...

The FOMO and pressure to "not be left behind" in the AI Bonanza is strong...

Whether you're a billion dollar hedge fund manager looking to deploy capital - or a solopreneur / small business owner simply trying to keep up with the AI curve and figure out how and where to implement in your business...

Which brings us to the question...

3 | What Does This All Mean for You and Me?

I believe the short answer is: Hedge.

And based on everything we've explored together in this issue (and past issues), I recommend taking a Barbell Approach.

Specifically...

• On one end: a Human-Crafted + Artisanal Core in your business that nobody can copy. I'm talking about your voice, your relationships, your in-person experiences, the unscalable touches that define your "category of one" business.
• On the other end: Highly-Targeted AI Assists that remove the drudgery and free your calendar - to automate the repeatable, mundane "non-client-interfacing tasks" and to amplify what already works behind the scenes.

What you don’t do is this:

Don't toss the baby out with the bathwater and let “AI everything” bulldoze what makes your business special. The magic that makes your people attracted to you and your brand.

(I'm seeing so many people mess this up - with more and more wishing there was a giant Ctrl+Z button for much of what they've done with AI-generated content in the last 12 months...)

Below I've put together a hypothetical, pragmatic plan that you can potentially execute in the next 30–90 days, beginning with:

STEP I - Draw the Line: Human Core vs. AI Assist

1. Define your “No-AI" Core. Draft a 1-page doc: these things are human-only in your business (strategy, source-of-truth content, brand voice, sales calls, client interaction, and anything that requires heart/humor/humanity.) Publish/declare it to your team and - if you’re feeling bold - to your customers.
2. Define your “AI-Assist" Perimeter. Document the repetitive, low-judgment work that AI will help with (summaries, first-pass research, formatting, repurposing, tagging, scheduling, transcripts, SOP drafts, etc). Give yourself a target of X hours/week of your time that you want to reclaim (so you don't end up swapping work you're doing now, for time sucked up simply working with AI tools..)

Which brings us to...

STEP II - Install a Simple AI Hedge Stack (Small Biz Friendly)

1. Pick One Copilot, One Automator, One Guardrail.
2. Pilot where ROI is obvious. Start with back-office and ops - not your brand voice. (This was one of the biggest observations from the MIT study). If it doesn’t save time or money in 30 days, kill it.

STEP III - Keep the Moat Human (Oxytocin > Dopamine)

1. Ship one “Source-of-Truth” piece weekly. Your long-form, in your voice, un-sanitized. Straight from your brain. Straight from your heart. Everything else can be repurposed from this.
2. Design one "Unscalable" client ritual. A handwritten note, 10-minute loom, surprise phone call, local meetup, or a client roundtable. Trust is earned in these “wasteful” moments. Remember: Optimize for Oxytocin over Dopamine.
3. Label it, don’t fake it. When AI helps you out, disclose it. An approach of “Disclosure over Deepfake” builds trust. Your voice has a unique energy signature and your audience can feel the difference.

Like for example, with this section of this newsletter - I asked ChatGPT to help brainstorm ways to "operationalize" some of concepts I've been writing about with practical, tactical steps. That's why this section "feels" a little different from the first part of this week's newsletter (It will also feel different from the passage coming after this section. You'll see what I mean in a moment...)

STEP IV - Be Ruthless About Results (Not Hype)

1. Red-Team Your AI Spend. Once a month: what did AI actually save or make? Keep what works and cut what doesn't. Consider capping your AI opex to a % of revenue until you've proven payback. (And remember to factor the value of the time you're personally spending into this ROI calculation. Don't let it be a black hole.)
2. Continue to Own Your Data. Continue capturing zero-party data ethically (surveys, quizzes, applications) and keep it portable so that AI can analyze it; but make sure that it doesn’t own or control it. Even in 2025, an email list of customers is still more valuable than a social media audience of subscribers.

A Simple 30-Day Sprint You Can Start On Monday

If you're looking for a simple way to start putting this all into action, here's a simple, sample plan:

• Week 1: Draft your No-AI Core & AI-Assist Perimeter. Pick one copilot + one automator.
• Week 2: Ship your first weekly Source-of-Truth piece of content. Add one Unscalable client ritual to your delivery.
• Week 3: Automate two low-judgment chores; install the human review step using the 10-80-10 framework.
• Week 4: Keep the wins, kill your AI darlings, and iterate from there. Remember, you don't have to get it perfect - you just have to get it going.

Which Brings Me to the Big Takeaway in All of This...

The big takeaway I want to leave you with is this:

Do NOT be misled by all the AI hype and euphoria...

Because despite what the LinkedIn echo-chamber might lead you to believe...

Outside the world of AI-obsessed digital marketers.

The shiny sheen of AI-generated everything is already wearing off in many other corners of the world...

What people are craving right now is what’s real.

They want to buy from humans whose demonstrated values they align with.

So yes, hedge with AI absolutely.

But remember to lead with your heart, your humor, your humanity…

(And yes, your humility...)

Because at the end of the day...

Humans want nothing more than to connect with another human.

A real human being with a real beating heart.

And that?

Is something AI cannot replicate.

(At least not yet....)

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Okay, I'll leave you with that for today...

Have a great rest of your weekend...

Remember to hug the ones you love.

And until next week,

Ryan :-)

P.S. Oh! I almost forgot! The "Surprise Announcement" I promised...

Guess what?!

The Digital Contrarian is now available as a...... Podcast! :-)

That's right!

In fact, you can check it out for yourself.... starting TODAY:

You can now officially listen to each week's issue of The Digital Contrarian in the form of an audio podcast episode available on Spotify (above)...

And available on Apple Podcasts (below)....

Which brings me to a TINY little ASK:

After taking time to personally record each audio issue of TDC myself (no Eleven Labs here, baby) I have one teensy little favor to ASK of you:

Would you be willing to leave a short review?

Specifically my ASK is this:

If you've been enjoying the written version ofThe Digital Contrarian each week, it would mean the WORLD to me if you would take a moment to leave a review of The Digital Contrarian on your preferred podcast platform of choice, where the audio version is now available:

Why am I asking for your help?

The reason I'm asking for help, is because you'll notice with the older podcast reviews above, we've done a complete reboot and rebrand of the "old" ASK Podcast and I would love to get a bunch of new reviews reflecting the new Digital Contrarian direction and my personal voice.

Reviews are the #1 signal to help others people know what you most enjoy about this newsletter each week.

And it would mean the absolute world to me :-)

(It would also be hugely motivating to read a few words shared publicly about how you're benefitting from this newsletter and how what I'm writing about is having an impact on you.)

So if you would be willing to do this for me, here are the important links:

Leave a review on Apple Podcasts.

Leave a review on Spotify.

THANK YOU!

* * *

Okay, I'll leave you with that for now.

Thank you so much for your support.

Have a great rest of your week...

And after you DO leave a short review...

Send me an email at contact@askmethod.com to let me know so I can say 'thank you' with a personal email reply :-)