I don’t know about you, but I’m already tired of all the generative AI (genAI) hype. I’ve been using the technology for a while now, and I’ve found ways it can be helpful — primarily as a search engine replacement — but it’s not everything it’s supposed to be.  This isn’t just cranky, cynical old me. In a recent IBM survey of 2,000 CEOs, Big Blue found that “only 25% of AI initiatives have delivered expected ROI [Return on Investment] over the last few years.” Further, “just over half (52%) of CEO respondents say their organization is realizing value from generative AI investments beyond cost reduction.” Adding insult to injury: “64% of CEOs surveyed acknowledge that the risk of falling behind drives investment in some technologies before they have a clear understanding of the value they bring to the organization, but only 37% say it’s better to be ‘fast and wrong’ than ‘right and slow’ when it comes to technology adoption.”  Really? Yes, I know about moving fast and breaking things, but are CEOs really paid big bucks to make expensive IT moves based on fear of missing out? I could do that, and I’d be willing to accept less money than the average CEO. Win! Win! Seriously, though, some in the industry have been doing the business math — and they’re finding genAI isn’t delivering on its promises.  For example, Microsoft’s been making Copilot the center of its end-user plans. There’s a teeny-weeny problem with that: users aren’t adopting Copilot. Period. As reported in Newcomer,  “At Microsoft’s annual executive huddle last month, the company’s chief financial officer, Amy Hood, put up a slide that charted the number of users for its Copilot consumer AI tool over the past year. It was essentially a flat line, showing around 20 million weekly users.” Flatlining, as anyone who’s ever watched a medical show knows, is a bad thing.  Even Microsoft CEO Satya Nadella realizes that some things are fundamentally wrong with AI.  He recently acknowledged there’s no killer app for AI. And he said this, may I remind you, after pouring more than $10 billion into genAI. Here’s some free advice for you, Satya: Simply adding Copilot features to every last program in the Microsoft portfolio is clearly not the way to profitability.  Even as businesses look to reshape themselves using the technology, they’re grappling with significant hurdles in turning innovation into sustainable profits. Despite soaring investments and rapid revenue growth in some sectors, many genAI businesses struggle with high operational costs and uncertain paths to long-term financial success. One of the most glaring challenges is the staggering cost of running genAI operations. OpenAI, the leading generative AI company, reportedly spent $9 billion in 2024 to generate about $4 billion in revenue, with the bulk of expenses tied to compute power for training and running AI models. This means, as Ed Zitron, well-known tech maven and cynic, said that OpenAI loses money on every paying customer, burning billions annually despite rising subscription numbers. But what they lose on each one, they’ll make up on volume, right? OpenAI, by the way, is the most successful genAI startup to date. I wonder what the balance sheets of the lesser firms look like.  True, some smaller genAI companies such as Tempus AI, which applies the technology in precision medicine, show promising financial momentum. It reported a 75% revenue increase year-over-year. Most of the others are still light years from profitability.  What’s the difference? Rather than some vague idea that genAI will magically make everything better, Tempus focuses on a particular business case in which it could improve. There’s a lesson here for anyone who wants to use genAI tools successfully.  Sure, Nvidia is doing great guns, but it’s not selling to businesses or consumers that use genAI. It sells to the companies that want to sell you AI services — there’s a big difference.  So long as startups such as OpenAI and Anthropic raise tens of billions of dollars, Nvidia will be fine. If venture capitalists ever start to wonder whether there’s a profit at the end of the business rainbow (rather than just eternal growth with no discernible business benefit), it will be another story.   Remember the dot-com bubble of the late 1990s and early 2000s? I do. I see the genAI bubble getting bigger and bigger, and every bubble eventually pops.