10 Oct When puffery runs amok, we all pay
A few years ago the practice of puffery—marketing claims that hold no legal weight due to their outlandish nature—was in decline. A few high-profile examples, including Theranos, Sam Bankman-Fried and their ilk, had met the limits of the law. Making venture capitalists and markets more cautious of extravagant claims.
However, thanks to the relentless shenanigans of Elon Musk and people’s collective capitulation to AI’s hype-driven shell game. It’s back. Like a bad penny.
After a brief side-hustle dismantling the US Government, Musk is working on Tesla and both Xs again. Where his track record shows how weaponising puffery acts as a defence when he gets sued for broken promises. With his legal team (paraphrasing here) arguing no reasonable person should believe what he says.
But the lawsuits barely tap on the brakes; he’s already bagged the results. Headlines and a nice stock price bump. Then untroubled, he’s on to the next lying promise. His showmanship is enough to make Barnum blush. And while he was the king of product puffery. He may have met his match.
Enter AI, and especially OpenAI. Here the emperor not only has no clothes, he’s parading down main street with a marching band while people throw streamers.
Despite few products and no profitability in sight. And with numbers that don’t remotely add up. People have swallowed the pitch and are outsourcing capability to cosplaying code. All while strip-mining their future of necessary experience.
Sure, you might (a huge unproven might) save a few dollars now. But you risk cratering critical thinking and leaving yourself woefully devoid of workers with the necessary know-how to fill senior ranks. That’s not even counting the environmental cost of running thousands of GPUs to write buggy code. And before you argue ‘but, what about’. Yes, it’s not all generic copy and dancing cat videos. There are areas where AI’s puff may have promise.
But while I work on a more detailed piece on how your choices about AI land in the brand, here are a few sentiments on the dangers of puffery that seem relevant to the moment.
Excerpted from the article Lessons of Theranos and its lying promises:
Amid the gobsmacking hubris is a more profound question. The recent investor land rush to find unicorns has turbo-charged founders’ puffed-up aspirations until, instead, they flip into a dance with lying promises.
Point in any direction, and you’ll find a sexy story without a plan for profitability burning billions, with outlandish valuations as a reward. It’s no wonder people think a grand vision is all it takes.
Puffery is a particular kind of problem. Because while companies have legal cover for using hype. There is no moral cover when people’s claims fail to meet the expectations they create.
Even when millions of lives and billions of dollars aren’t at stake, it’s worth considering the question, ‘Am I making a promise I know I can’t keep?’
Puffery should come with a buyer beware label. Because there is always a casualty when the only fuel is hype and hope. Every unmet expectation erodes value, and when there’s nothing left to trade, the organisation ceases to exist …”
Or in the case of AI. Markets, sectors, jobs and, in dystopian versions, humans all die.
So, perhaps Theranos is a cautionary tale for using and talking about AI in your organisation. Where their lying promises laid bare, founders in jail, capital and support exhausted, the company collapsed. And in a puff, they were gone.
Thanks for reading.