The industry’s foremost figures swear that artificial intelligence (AI) is here and only going to get better. The tech elite, which is telegraphing its potential to the masses, swears that there’s only one way to adjust: use it, learn it, and adjust. And if not, you’ll be left behind.
Only, that’s not really a foregone conclusion. Despite how tech companies continue to present AI as an “inevitable” part of the future of work and life, its quest for world domination (and perhaps a growing share of the labor market) is in question.
New data about its reception among the American public and its utilization by global businesses are at the core of the question.
AI has a messaging problem
In recent weeks, we’ve touched on how the Iran conflict is affecting everything from energy to agriculture. It’s also affecting the picture for AI, namely through impacts to semiconductor manufacturing.
However, aside from geopolitical problems, there’s an even bigger problem for the AI industry to solve: its image. Despite what is said, AI is not wildly popular with Americans or businesses. Messaging is a large portion of the reason why.
Americans fear AI (and might resist it)
Just 17% of Americans polled in a recent Pew Research study said they expect that AI will have a positive effect on the U.S. over the next 20 years. These results are not singular among western countries. In fact, Americans seem a little bit more optimistic and measured in their appraisal of AI’s possible impacts (that is to say, a lot of them think it could be equally good and bad).
These answers are really no surprise seeing how the industry openly touts the possibility of economic disruption (or even, dramatically, human extinction.) In recent weeks, a number of firms have conducted “AI-driven layoffs”, telegraphing to the market that the word “AI” is congruent with “job loss.” That is not an association which is likely to win many fans.
Arguably worse though, possible positive use cases for AI have been wildly overshadowed by louder use cases. What most Americans know about AI is that it is used for surveillance technology, helping young people cheating on exams, and how it is used to charge you more money using practices like dynamic pricing.
So understandably, you have a large base which is disillusioned by the technology. That base is evidently not cheering for this future, and an uptick in resistance to data center development (mostly due to concerns about utility costs and community blight) and a “hands off” approach to regulating AI has followed.
You might suspect that these are frivolous protests, because big business always gets its way in America, but there is concern about the matter in which AI is being communicated to (and received by) the public. So much so that the AI industry is throwing in millions to fund pro-AI candidates.
Businesses reverse course on AI, too
Maybe because companies are made up of people, it’s understandable why many enterprises have remained on the sideline.
Last year, data from Apollo found that AI adoption had stagnated at many businesses. More recent analyses show a decline in labor force usage of generative AI, even.
🚨Another update to our Generative AI US adoption time series results from our paper “The Labor Market Effects of Generative Artificial Intelligence”: we find LLM adoption at work in the US fell over the past quarter (while still up substantially from a couple years ago). pic.twitter.com/Lo1v0V2zq0
— Jon Hartley (@Jon_Hartley_) March 27, 2026
This is not what you’d expect based on the stratospheric growth of various AI businesses like OpenAI and Anthropic, both of which are angling for a U.S. IPO this year. It’s even more jarring considering the rapid acceleration of GDP in recent quarters, along with evidence of an uptick in productivity. However, even that acceleration has remained in question.
Related: After Rate Cut, Fed Chair Jerome Powell Credits Automation and AI For Contributing to This “Structural” Boom in the U.S. Economy
Maybe businesses are struggling to find a killer use case or application for implementation, but there’s also evidently a worry about who will bear the future costs of the AI buildout. PwC’s Chief U.S. AI Officer Dan Priest told TheStreet that “cost is very much part of the discussion” that the firm is having with businesses, highlighting a lesser-discussed angle of the AI boom.
There’s also the possibility that AI is just not a priority for many company decisionmakers. As the Iran conflict comes up on two months, there are persistent worries about the economic environment. Chief among those worries are the possible impacts which could arise from higher energy prices, including a reacceleration of inflation which could dampen demand and push the U.S into recession.
It’s not as inevitable as it seems
Amid a downturn in technology stocks over the last few weeks, many analysts are jumping to the ultimate conclusion that this ‘version ‘of the AI boom is “dead.” Oracle canceling a data center expansion in Texas and the demise of OpenAI’s video-making app Sora are certainly not helping them make the case that the technology is alive and well.
Shares of one-time AI plays like Microsoft have lost over 24% of their value year-to-date. Tesla is off 19%. Nvidia, which has seen massive growth amid demand for its AI chips, is down 13%. Google and Amazon are off 13% and 11%, respectively. All of these losses are much steeper than the underlying indexes they sit atop, namely the S&P 500and Nasdaq, both of which have fallen into correction territory amid the Iran conflict.
Sure, some pickaxe plays are still humming along, but it seems that the market’s blind affinity for anything with “AI” in the margins has likely narrowed to businesses capturing the monster spend coming out of hyperscalers. For example, SanDisk Corporation is one of the best-performing stocks in the S&P 500 this year, more than doubling thanks to the boom in flash memory. And even the iShares MSCI South Korea ETF ($EWY), which holds semiconductor giants like Samsung and SK Hynix, remains up 13.9% year-to-date despite a 23% drawdown from all-time highs.
Even if the war was fully and unequivocally over today, it’s unlikely that stocks would simply bounce back to where they were. Given the geopolitical situation, investors are likely to be a little choosier with their allocations. Perhaps even more so given worries about adoption and the cancellation of major AI infrastructure projects. It is possible that just like crypto, electric vehicles, clean energy, and robotics before, investors are no longer rushing to put a premium on AI’s potential, especially relative to its current value.
Nonetheless, nobody should return to being ambivalent about its disruptive potential, even if the recent activity on market outwardly suggests that it does not deserve the premium it had earned. The technology in its current form has demonstrated promise… now if only they could have it stop hallucinating or writing bad code.