Big Tech is hyping up the power of AI tools. Some of their clients aren't as impressed. (2024)

• Markets: At Blackstone's internship, nice people finish first.
• Tech: OpenAI's brain drain is a bad look for Sam Altman.
• Business: Gyms have a Gen Z problem.

But first, is this thing even worth it?

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The big story

A lack-of-demand problem

The tech industry's big plans for AI have hit a roadblock: Some of their customers don't find the tools useful.

Business Insider's Alistair Barr spoke to a chief marketing officer about their less-than-stellar experience using Google's AI tools.

On paper, this should be an easy win. In the pantheon of industries set to be upended by AI, marketing is somewhere near the top. (Don't feel bad, marketers. Media is not far behind.)

From personalized emails to determining where ads should run, AI could supercharge a company's marketing department in plenty of ways.

Except… it hasn't yet.

At least that's what the CMO told Alistair. One tool disrupted its advertising strategy so much they stopped using it. Another was no better at the job than a human. And a third was only successful about 60% of the time.

An entire industry can't, and shouldn't, be judged by one person's experience. But the CMO isn't alone in their frustration.

A pharma company stopped using Microsoft's Copilot AI tool after an exec compared its work to "middle school presentations." And this isn't an age thing. Morgan Stanley's interns don't love using AI chatbots in customer service.

AI will get better, but the clock is ticking for tech firms racking up big bills.

I'm old enough to remember when a phone call to your house might kick you off the web and your mobile phone's form of entertainment was Snake. Tech has a way of evolving and fine-tuning its products.

But AI development isn't cheap. The hardware, people, and power requirements are a big financial drain. So while it's only fair to give the industry time to work out the kinks, the bills aren't going to slow down anytime soon.

Still, tech has the ultimate trump card. As much as the industry wants AI to prove useful, the rest of us need AI to prove useful.

For over two decades, tech has been the rocketship investors have strapped themselves to.

The internet. Social media. Cloud computing. Tech has consistently found new trends to ride to exponential returns, and we've all gladly gone along for the ride.

AI is the latest, and everyone has bought in, leading the stock market to new record heights this year.

Should that falter, it's not just tech that'll tumble. The pensions, 401(k)s, and other retirement plans built on the promise of tech's continued rise will drop with it.

3 things in markets

1. Bank of America wants everyone to take a chill pill. Michael Gapen, the bank's chief US economist, said a recession is "highly unlikely." Gapen said a misreading of the economic data — like Hurricane Beryl's impact on the jobs report — led to the overreaction and threw cold water on the possibility of an emergency rate cut.
2. Gov. Tim Walz doesn't appear to be slinging tendies or checking r/wallstreetbets. The Democrats' VP pick doesn't own a single stock, according to financial disclosures. In fact, when he was in Congress he sponsored the bill formally banning insider trading by government officials.
3. At Blackstone, niceness is a secret weapon. Blackstone COO Jon Gray recently shared career advice with the private-equity giant's summer analysts. BI spoke to four Blackstone insiders to understand more about how to succeed at the firm. Here's what they had to say.

3 things in tech

1. OpenAI's castle has no moat. Having one could have kept OpenAI from losing key members over the past few weeks. Instead, the company is facing a brain drain — and it's not a great look for Sam Altman.
2. The hidden objective in Elon Musk's X advertising lawsuit. Many legal experts think the platform's antitrust lawsuit against a group of advertisers is baseless. But a legal win isn't the point. Musk's true goal is to sap his opponents' resources and hinder their work, BI's Lara O'Reilly writes.
3. Early testers share their thoughts on OpenAI's up-and-coming generator for creatives. Sora, OpenAI's forthcoming text-to-video generator, turned heads when it was teased in February. Visual artists and designers granted early access to the tech shared what they think Sora's strengths and weaknesses are.

3 things in business

1. Gen Z's love of lifting pushes gyms to their limits. Thanks to the rise of "gymfluencers" and a shrinking number of places to meet new people, Gen Zers are flocking to gyms in droves. But gyms aren't built to host that kind of capacity, forcing many of them to rethink their business models.
2. How much are we willing to pay for convenience? A lot, apparently. Americans are still having a lot of stuff delivered from DoorDash and Uber, even as we pull back spending on other goods. We may have witnessed the demise of the millennial lifestyle subsidy, but it turns out convenience isn't dead yet.
3. For Disney, theme parks are out and streaming is in. Disney reported lower-than-expected earnings from its theme parks division, a bad sign for the economy as consumers look to rein in spending. On the other hand, Disney made money in streaming for the first time ever, thanks to hefty price hikes. Execs also announced a password-sharing crackdown, effective next month.

In other news

• Taylor Swift's 3 Eras Tour concerts in Vienna are canceled after police say they thwarted a terrorist plot.
• Flop era: How the British behemoth Burberry became fashion's biggest fail of the year.
• The minimum wage is dead — so now is the perfect time to increase it.
• Google Workspace VP Bob Frati has left after just over a year at the company.
• There's a double-edged sword high performers face at work, and it's costing employers their talent.
• Olympic couples are mixing romance with competition. That's not necessarily a bad thing, a psychologist says.
• Boosting worker well-being doesn't have to be pricey. Simple flexibility can do the trick.
• Warner Bros Discovery says it overpaid for its TV networks by $9 billion.
• Costco is leaning into its Netflix-style membership crackdown.
• A guy who bought HarrisWalz.com in 2020 just got a huge payday.

What's happening today

• Paramount, News Corp, and other companies report earnings.
• Tropical storm Debby is forecast to hit the Carolinas.
• San Diego Zoo unveils two new pandas to the public. A win for panda diplomacy!

The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, senior editor, in London. Annie Smith, associate producer, in London. Amanda Yen, fellow, in New York.