Embracing AI Technology for Technology’s Sake

It is hard to be a competitive swimmer if swimming in mud. While economy is in a state of uncertainty, is “competitiveness” the real motive driving AI, with all its unknowns, into everyone’s life for every situation?

by Dean Prigelmeier, President of Proactive Technologies, Inc^®

This time, the rush is on to be seen using Artificial Intelligence (or even just talking about using it)… even if they don’t know why and for what purpose. Consumers are struggling, so are small, mid and large-size businesses. Private employer workers, federal workers and institutions are toiling in a manmade world of chaos and uncertainty. It hardly seems like a time to aggressively push AI – with its known and unknown risks – onto it.

To many, AI seems to be a solution looking for problems, similar to Microsoft’s push to Windows 11 – enhanced for gamers and video viewers as if everyone is using their PC for that. That might be a reason why Microsoft had to extend its security updates of Windows 10 to those not seeing a good reason for the switch, that and the fact that there is a good chance software applications and peripherals might have to be upgraded to accommodate Windows 11 like with previous upgrades – a costly experience for any size business.

A growing number of business leaders are advocating for a return to a long-term US industrial policy to guide all of these new technologies into a coherent long-term plan for the broadest impact on US economic sanity, stability and sustained vitality, not to mention for a stable and thriving global market to which to sell US products and services. To move away from an economy driven in self-serving directions by one or a few incredibly wealthy individuals.

The well-funded marketing push by Big Tech and investors to force AI into every corner of life, business and society, seems to add fuel on an already growing fire. In 2024, investors put $1.6 trillion dollars into AI. The Manhattan Project during WWII to develop the first nuclear weapon only spent $30 billion in today’s dollars! “The US’s largest companies have spent 2025 locked in a competition to spend more money than one another, lavishing $155bn on the development of artificial intelligence, more than the US government has spent on education, training, employment and social services in the 2025 fiscal year so far [August, 2025].” It is estimated that Big Tech will spend $725 billion in 2026. With that kind of money behind it, the next innovation – self-tying shoe laces – could be the next “trend.” What if 1/10th of that money was made available for business R&D, small business development and worker training? Perhaps economic growth would be more broad-based, deeper and sustainable, not shallow, suspect and siloed. A lot of that money is spent on the construction of data centers around the country, which are being increasingly opposed by residents for fear of draining the community’s scare water sources, generating ambient heat and noise, and raising consumer electric rates even more. Other than construction jobs, data center isn’t project to create many more.

For the past year and a half, small, medium and large-size business in nearly all sectors, particularly manufacturing,  have struggled to adjust to ever-changing tariffs on imports by our government and tariffs on exports by other countries in retaliation. Consumers watched prices rise, wondering how high they will go and if they will ever come back down. The housing market is predicted by some to crash in 2026, the private credit market, as well. If that isn’t enough, this “excursion” into Iran led to the closing of the Gulf of Hormuz, shutting down the shipping of oil which drove up the cost per barrel of crude oil, aviation fuel and natural gas, raising the price at the pump for gasoline and diesel. The closure also held back liquid natural gas and fertilizers used to grow and produce the world’s food supply. Disruption to transportation, energy production, plastics, fertilizer – all dependent on an open Gulf of Hormuz – are expected to drive prices for strained producers and anxiety-driven consumers even higher and to stay around longer.

World food production could be hit hard – a good example of the compounding effects of what seems to be a “minor inconvenience.” Farmers plant each spring. They need their fertilizer. If they don’t have it, they might choose not to plant for fear of a marginal crop. If they do plant and have a harvest, they have to contend with the higher prices for fertilizer and fuel for their machinery. Even if food producers let farmers raise their crop prices to make up for some of it, food producers will be hit with higher supply, energy and production costs. The higher price of oil will raise the costs on their packaging and shipping. Not willing to bear the full cost increase, consumers will be hit with the rest.

Not helping, either, is this administration’s executive orders that can cause the economy to careen in ever-changing directions with the stroke of a pen.

Introducing AI without rectifying these man-made factors creating instability and uncertainty, nor addressing the known and unknown AI risks,  seems ill-timed, rushed and driven by other than altruistic notions of “increasing US competitiveness.” The movement exhibits a similar desperation seen during the run-up to the Crash of 2008, for those who choose to remember. Now, 5 or 6 bid tech firms are driving this wave, and companies owned by private equity and hedge funds are pushing AI into their holdings to help drive their side-bets in AI higher. Then there are speculative opportunists that are trying to find a way to monetize the hype for themselves.

I am reminded of a 2006 movie entitled “Idiocracy,” which if you haven’t seen it I highly recommend. There is a scene where the President (a former professional wrestler) hired a time traveler from the past to find out why all of the food crops are dying. Right off, he notices all of the crops are being watered with a sports drink. At a cabinet meeting he asked why that was so, and the only answer he heard repeatedly from the cabinet members was, “because it has electrolytes.” It turns out the biggest “sponsor” of the White House and president was a sports drink manufacturer, and it was a line from their commercials. An executive order mandated all crops be watered with their sports drink which, ever since the policy was enacted, was killing off crops. Long story short, the time traveler switched watering back to water and the crops returned. The movie is filled with funny anecdotes like this, leading the producer/director Mike Judge to comment, “when we started filming I thought we were making a comedy, but as we got further into it I realized it was looking more like a documentary” of where humanity was headed through bad policy choices.

Decisions forced on the broad masses, driven by extreme profits for a few, without them asking for AI in the first place, takes a lot of muscle. It takes monopoly and oligopoly power, and a government that cleared the regulatory path. The risks to firms, including exposure of intellectual and proprietary property to theft, exposure to yet-to-be discovered cybersecurity risks and elevated danger from existing methods, deep fakes and extortion, and disruption to infrastructure – both external and internal, will be left to courts or dismissed by firms so severely damaged they cannot recover. Most importantly for the future of society, students and workers who have suffered in the last few decades now have, once again, little idea on which career paths will materialize and are lasting, and which  will be disrupted or destroyed at a vulnerable time in their life.

If this AI push fails, or falls way short of the promises, the additional chaos left behind risks making the US economic environment uninhabitable for consumers and producers for some time. If government leaders don’t, or refuse to, recognize these probable threats prior to rolling-out technology like this or at least early on, it will lengthen the time before corrective, preventative action is, or will be, taken. Guardrails and standards put in place may be established after the fact. This country has a history of leaving the cleanup and losses to those who had nothing to do with the mess and least able to bear them, and celebrating the brilliance of those making money off the distress.

The Big Tech companies behind the AI push stand to make a massive amount of money if it fails or succeeds as will the large investors that are helping to drive the narrative in the media by their massive investments, for now. It is like a massive “chain letter;” a slow-motion “pump and dump” scheme, with those first-in making the gains and everyone else as “unwitting donors.” Collaterally, everyone else is dragged along for the ride with no idea when or where we will be left off and if we still have a role if carnage is left behind. We saw this in the Crash of 2008, and we could be repeating history on a much larger scale.

Remembering recent history might be helpful. Even weeks before the 2008-2009 Crash, business shows, mainstream media, social media were shaming consumers into buying a house “while the time was right,” or maybe 2 or 3 homes. Banks were rushing out “no document loans” to anyone with a heartbeat. I experienced this personally, even though I was not even looking for a house – convinced a year or more before a crash was coming. Restaurant bussers were able to get a variable rate loan for an over-valued home down payment, an adjustable rate mortgage and even a variable rate home equity line of credit. The banker didn’t care because the mortgages were bundled into securities that were sold to pension funds and other public and private investors. As the charade was discovered (a few investors shorted these precariously positioned banks and made incredible sums of money), hundreds of banks about to fail were driven to collapse by lack of liquidity. Any manufacturer or business that found themselves “over-leveraged” when the banks called in the notes were either crippled or pushed into bankruptcy. When the Crash hit in the US, it spread around the world economies and societies like the Covid-19 pandemic.

The Results of the 2008 Crash:

• 10,000,000 homes were lost
• 8.8 million people lost there jobs (“From 2008 – 2010, “Since the start of the recession, 8.8 million jobs have been lost, according to the Bureau of Labor Statistics. In the U.S., jobs paying between $14 and $21 per hour made up about 60% those lost during the recession, but such mid-wage jobs have comprised only about 27% of jobs gained during the recovery through mid-2012. In contrast, lower-paying jobs constituted about 58% of the jobs regained.[11]jobs created after 2010 were typical lower-wage and no longer near the family.”}
• Home Values lost $3.4 trillion,
• and Stock Values lost 7.4 trillion.

Incomes dropped, families were disrupted and displaced. Societies paid a heavy toll for someone else’s excessive speculation. Many haven’t fully recovered from the Crash of 2008-09.

In many ways, the US and the world are at the same crossroads with the heavy-handed speculative push toward AI. Similarly to the run-up to the Crash of 2008, too many people are scrambling to be seen in the AI camp even if they really cannot explain why or know how they stand to gain in any way.  When asked specifically how they would use AI to improve operations they draw a blank or regurgitate media talking points like, ‘it will improve productivity” or “it will make us more competitive” or “we can’t let China beat us.” Even students, professors and workers have morphed into loud sycophants (probably more out of extreme hope for something to improve their future), not knowing if they have a role in that new economy or what could guarantee them a role. Collectively they are “unwittingly willing” additional uncertainty and risk on a brewing and troubling economic and geo-political landscape. Let us all reflect on the recent mania of “Internet of Things,” with “smart” everything – cars, homes, TVs, refrigerators, wash machines, toasters, microwaves, phones, toothbrushes…even Smartwater. The emphasis receded after the initial investors made their money and the marketing push faded. Some of the technology stayed (in practical forms} and some were rarely mentioned anymore except in jest. Engineered dependency has injected new issues, such as with privacy, personal autonomy, safety and security, for society and humanity to deal with.

Société Générale’s chief global strategist Albert Edwards, it is said, is not known for his optimism. He has been “rolling his eyes” at the AI wave. “The Wall Street veteran made a name for himself in financial papers in 1996 with a bold prediction about an “ice age” of economic stagnation and negative bond yields in the west that proved at least partially correct. And in recent years, Edwards has been a rare voice from finance legitimizing the controversial term “greedflation”—the criticism of corporations for using rising material costs during the pandemic and war in Ukraine as an “excuse” to boost their profit margins. In April 2023, his lament about the economic impact of corporate greed rang out across the Street: “We may be looking at the end of capitalism.””

A lot is at stake for Big Tech, and this time governments are more complicit and even partners. Private equity firms and hedge funds, that bought a stake in AI becoming and staying mainstream, are gambling on an outcome more uncertain farther down the chain. According to Danielle Abril of the Guardian’s article, “While the drumbeat of companies that say AI will help them do more with less is getting louder, it’s unclear whether AI is actually driving cuts. Some companies may be “AI-washing” layoffs, using the technology as a convenient excuse for a slowing labor market, lagging consumer demand or rising costs, researchers and AI experts said… If a company is struggling financially, saying AI drove cuts definitely makes for a better story, said Thomas Malone, professor of information technology at the Massachusetts Institute of Technology’s Sloan School of Management.”

The uncertainties and risks with AI are growing exponentially., and manufacturers are not immune And as we have learned time again that anything developed purportedly for good can be utilized for bad. AI is being used to amplify hackers and fraudsters efforts to manipulate and exploit consumers, and extort and cripple networks and computers. At the same time, the US government weakened its cybersecurity regulatory efforts and groups, such as CISA, designed to monitor illicit activity. Proponents of AI say that AI can be used to protect us, but are they sure, at what price, can we trust it and who can afford the protection?

In AI’s use in human resource’s decisions, cases are moving through the U.S. courts. In Mobley v. Workday currently in U.S. District Court, “…four plaintiffs over age 40 arguing that the AI-powered recommendation system embedded within Workday discriminates against older applicants.” Workday has more than 11,500 users globally and counts more than 60% of the Fortune 500 among its clients.  Millions of job seekers over 40 can now sue Workday

Are we in an AI bubble? Time will tell, but the signs we are near the peak of a wealth-driven speculative bubble are here. Private credit is pulling away from the massive AI investments that started the bubble. Early underwhelming results are coming in showing AI isn’t living up to the promise. Lawsuits and legal action are consuming a lot of time, resources and forward momentum of both AI providers, intermediaries, and legitimate users by those who use it nefariously. And with regard to the projected massive  productivity gains from AI over the next decade, “A recent survey of 69 economists, 27 AI industry professionals, and 25 AI policy professionals concludes that most unconditional economic forecasts of productivity growth during the coming AI era (2025-2035) are rather close to historical trends.” “The macroeconomic return to the gigantic AI-capital expenditures will most likely be negative over the next decade” likely from the need to “proof” AI results for errors and hallucinations can take longer than originating the work. Just like 2008, how large the bubble is allowed to grow will determine how large and deep the destruction and collateral damage left behind will be.

Needless to say, many manufacturers are slow to adopt AI for a number of reasons – many not of their making – while they wade through difficult waters. They have heard the hype before (e.g. the Internet of Things clamor) and can’t afford a major misstep now while navigating an economic mine field. While Big Tech is relying a wide-spread adoption to cement AI’s place, without consideration of all that is going on, the “early adopters” don’t have much in the way of positive results to report, moving from introduction to growth stage will be difficult and reaching product maturity, like IoT, may become impossible.

More and more consumers (many also resisting on a number of the same grounds) and business leaders of all size enterprises, should move forward with eyes wide open. Make sure their fundamentals are sound before taking on unclear and unquantifiable risk. As we saw in 2008, one misstep can set progress back broadly for a decade. Being lead down a similar path by some of the same folks with a similar game plan should keep anyone on their toes. If this path is leading the US and the world toward another major disruption, it could be big enough to last decades.

It seems reasonable to say that we would be better off if we slowed the pace of AI adoption and waited until after the economy stabilizes for an extended period. Consumers and businesses should demand safeguards be put in place first (or at least concurrently). International laws and institutions to punish those violating the established rules, as well as deregulated regulations that need to be reinstated, should be harsh, enforced, and completely transparent of who is investing in what and why it is needed. If not, straightening out the mess will be like untangling a fishing reel after backlash – sometimes it is so bad you end up throwing the reel away and starting over.

 

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