The AI Hype Tax: How Overpromising Hurts Real Business Results

June 13, 2025 • 2 min read

I recently spoke with a tech leader at a major company who shared something that's been bothering me. Despite being sharp technically, he'd been swept up by AI vendor promises that sounded too good to be true – because they were. It got me thinking about accountability in how we sell emerging technology. Let me paint you two pictures: **The Banker**: David, a financial advisor, promised clients "15-20% guaranteed returns" on his investment product. When portfolios crashed 30%, regulators destroyed him – fines, license revoked, career over. The press called him a greedy fraudster. **The AI CEO**: Meanwhile, tech leaders routinely promise AI will "replace entire workforces within months" or "achieve human-level reasoning by next year." When chatbots hallucinate in court filings or autonomous systems cause accidents, they raise billions more, grace magazine covers, and advise world leaders as celebrated visionaries. Same overselling, opposite consequences. Here's the thing: I'm very positive on AI. I see the real value it creates at the companies I advise, in my own work where AI is a force multiplier, and in AI-first companies like Cursor hitting \$200M revenue (ARR) with just 20 employees. People who understand how to actually use the technology benefit hugely – while others get lost chasing overpromised solutions. But watching brilliant tech leaders make multimillion-dollar decisions based on vendor hype instead of realistic capabilities? We're missing out on AI's true potential. And that hurts. The companies succeeding with AI aren't chasing moonshots – they're identifying specific use cases, setting realistic expectations, and measuring actual ROI. They're the ones seeing transformational results. The AI revolution is real, but it happens through solving actual business problems with realistic expectations – not through hype cycles that burn trust. Let's focus on the genuine value AI delivers today while being honest about current limitations. That's how we build sustainable adoption, lasting success, and an industry we can all be proud of. The technology is remarkable enough without the snake oil sales tactics.