AI Adoption Slower Than Market Assumes

AI hype is outpacing reality. Despite soaring AI capital expenditure and booming data centre construction, the actual intensity of AI use at work remains stable, not explosive. This means the feared rapid labour displacement is not materialising at scale yet. The article highlights that AI adoption follows historical S-curve patterns, constrained by high integration costs, regulation, and diminishing returns. The key commercial implication is that AI will likely complement rather than replace labour broadly, preserving demand and supporting new business formation. The missing piece here is recognising the economic boundary set by compute costs versus human labour costs, which caps substitution potential. For operators, this means betting on AI-driven productivity gains to offset broader growth headwinds, while focusing on sectors where AI augments human work. The real risk is overestimating AI’s pace and scale of disruption, leading to misallocated capital and strategy. Next steps include monitoring AI usage intensity metrics closely, investing in AI infrastructure-related hiring trends, and preparing for a gradual, not abrupt, transformation in labour dynamics.