AI data that’s not like the others…

Happy Friday everyone. And of course another week deep in the AI conversation. We had the AI summit in India with Sam Altman and Dario Amodei sharing their latest views on where this technology is headed. We did not learn all that much more.

At the same time, earnings season rolled on. And what stood out again was that companies largely finished the year strong, and consumers are still spending. The data does not reflect an economy rolling over.

Next week, we hear from a large group of software companies. That will be important. Software is where AI expectations are arguably the highest or lowest depending on the view. This week’s data I think is important to framing the path of the AI story. Some of the real time indicators suggest the outcome may not be as linear as many assume.

Here is the summary if you want just that:

• Consumer spend intentions up

• Apple CAPEX vs others.

• Software developer job opening up.

• Websites +30% Y/Y

Corporate insiders at companies are buying their shares at a pace we have not seen since late 2022. Before that was late 2020, and 2015-2016 was the time before that. I’d say 2015-2016 is closest to today when software was also in question at the time. Look at the cluster of buying today and how that compares to other market conditions. Takeaway = favorable.

Now back to AI. This week I asked AI a simple question: the car wash is 100 meters away, should I walk or drive?

It gave me a perfectly logical breakdown about time efficiency and effort. Walking would take about a minute. Driving might actually be slower once you factor in starting the car and parking. Clean reasoning yet completely missing one small detail. The car.

That’s the joke, but it’s also the point I am trying to make here. AI is exceptional at processing the literal question in front of it. What it still struggles with is unstated context. Humans instantly understand that if you’re washing a car, the car has to move. AI optimizes the math.

Just saying…

Next is such an interesting chart. This CAPEX chart tells a story I don’t have the answer to…

Amazon +42% Y/Y

Microsoft +89%

Alphabet +95%

Meta +48%…

and Apple -19%

While hyperscalers are aggressively building AI infrastructure, seems like Apple appears restrained. Hmm… what do they see?

Another narrative worth challenging: software developers are supposedly being displaced by AI. Yet FRED data shows software development job postings on Indeed slightly above levels from the same time last year, recently ticking up to 69.1 on the index. The popular storyline is that AI eliminates coding jobs. The data, at least for now, points to continued demand. It may be different type of work, but still interesting data.

Now what is moving? App creation.

Since the release of agentic coding tools, iOS apps released each month have accelerated sharply, with Y/Y growth moving from low single digits to +40%, +60%, and recently near +68%. On a trailing twelve month basis, growth has climbed to +31%.

The narrative says AI replaces coders. Maybe but the bigger story should be that data suggests AI is increasing software supply.

Here’s another datapoint. Says same thing as above. Lots of creation happening out there.

Next up. Salesforce data. This is looking at API usage for voice and messaging and signals their AgentForce platform. It is seeing some acceleration here. Maybe it’s not going to zero.

Let’s switch it up for a moment.

That data on AI should at least make you pause and question the simple “AI eats the world” narrative.

If the story were that linear, the data would likely look a lot cleaner. At the same time, let’s be clear: we believe AI is one of the most important technologies we will see in our lifetime.

Here’s spending trends. Softlines, which include apparel and footwear, are starting to show renewed traction. On a 2-year basis, spending intentions are running +3.7% Y/Y. Consumers are still leaning in on discretionary categories.

Now is inflation a factor? 32% of those surveyed say they are not seeing price increases on apparel. Down from +40% couple years ago.

Last but not least, ChatGPT’s business model is starting to look a lot more like search.

Ads are now appearing on the platform, and early indications suggest they are commanding some of the highest CPMs per 1,000 impressions. High CPMs imply high intent. And high intent is what advertisers are willing to pay for.

But here’s what I’m thinking. If ChatGPT leans into an ad-driven model, its incentives shift. For the platform to win, advertisers need to win. They need conversions. They need revenue. They need ROI.

That dynamic can create a locking-in effect. Instead of replacing every company on the internet, the model may increasingly prioritize enabling businesses that perform well within its ecosystem. In other words, success on the platform becomes mutually reinforcing.

That doesn’t mean disruption disappears. But it does complicate the simple narrative that AI will just disintermediate everything in its path. this business model can shape behavior.

See you next week.

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