Can Investors Trust AI Sales Figures? Asks Wall Street Journal Opinion Piece (wsj.com)
(Monday May 04, 2026 @03:34AM (EditorDavid)
from the down-for-the-accounting dept.)
- Reference: 0183113014
- News link: https://slashdot.org/story/26/05/03/1721250/can-investors-trust-ai-sales-figures-asks-wall-street-journal-opinion-piece
- Source link: https://www.wsj.com/opinion/can-investors-trust-ai-sales-figures-c60c46bf
[1]A Wall Street Journal opinion piece warns of "a troubling trend" in AI's growth. "Rather than selling software, some AI companies are paying their partners to use it."
It cites OpenAI's $1.5 billion joint venture with private-equity firms, Anthropic's $200 million contribution to a private-equity firm joint venture, and Google's $750 million subsidization of Gemini's adoption by consulting firms. "These agreements muddy the distinction between a company's sound growth trajectory and artificial financial engineering."
> [T]he scale and structure of the recent AI deals go beyond standard incentive mechanisms... When a seller pays customers to buy its products, it is unclear if its revenue growth reflects vibrant demand or a willingness to accept subsidies.
Slashdot reader [2]destinyland writes:
> This warning comes from a prominent figure in the investing community. For six years [3]Robert Pozen was chairman of America's oldest mutual fund company, after five years at Fidelity. An [4]advocate for corporate governance , he's currently a lecturer at MIT's business school (and the author of the book [5] Remote Inc.: How to Thrive at Work...Wherever You Are ). "As AI companies prepare initial public offerings, investors should scrutinize their numbers closely," Pozner writes, warning about "time-limited financial support".
"In evaluating AI sales figures, analysts should consider the distorted incentives that the recent financing deals create," writes Pozner:
> Private-equity firms, enticed by promised returns, might demand rapid rollouts of AI products, rather than ensuring their orderly and safe development. Portfolio companies of private-equity firms may embrace AI tools not because they are needed but because adoption is mandated by their owners. Consultants may favor one set of AI models based on the subsidy instead of the merits.
>
> If guarantees and subsidies are major factors in the rapid adoption of AI tools, investors should be skeptical of AI companies' revenue projections. Many of their customers enticed by consultants will stop paying full price when the financial incentives are gone. Many of the portfolio companies of private-equity firms could back away from selected AI tools once these joint ventures expire. The challenge with evaluating these AI financing deals is the lack of transparency. At present, AI vendors don't separate revenue driven by subsidies or joint ventures from standard sales.
>
> The lesson from the telecom debacle is that financial engineering can obscure, for years, the difference between real customer demand and demand driven by incentives. When AI companies begin to finance their own product distribution, guaranteeing returns to investors and subsidizing sales, it's a signal for investors to dig deeper.
Investing in an AI company? Ask what percentage of enterprise revenue is coming from subsidized channels or joint ventures, Pozner suggests. And the renewal/retention rate for customers not supported by subsidies or joint ventures...
[1] https://www.wsj.com/opinion/can-investors-trust-ai-sales-figures-c60c46bf
[2] https://www.slashdot.org/~destinyland
[3] https://mitsloan.mit.edu/faculty/directory/robert-c-pozen
[4] https://en.wikipedia.org/wiki/Robert_Pozen
[5] https://amzn.to/4cWCYWJ
It cites OpenAI's $1.5 billion joint venture with private-equity firms, Anthropic's $200 million contribution to a private-equity firm joint venture, and Google's $750 million subsidization of Gemini's adoption by consulting firms. "These agreements muddy the distinction between a company's sound growth trajectory and artificial financial engineering."
> [T]he scale and structure of the recent AI deals go beyond standard incentive mechanisms... When a seller pays customers to buy its products, it is unclear if its revenue growth reflects vibrant demand or a willingness to accept subsidies.
Slashdot reader [2]destinyland writes:
> This warning comes from a prominent figure in the investing community. For six years [3]Robert Pozen was chairman of America's oldest mutual fund company, after five years at Fidelity. An [4]advocate for corporate governance , he's currently a lecturer at MIT's business school (and the author of the book [5] Remote Inc.: How to Thrive at Work...Wherever You Are ). "As AI companies prepare initial public offerings, investors should scrutinize their numbers closely," Pozner writes, warning about "time-limited financial support".
"In evaluating AI sales figures, analysts should consider the distorted incentives that the recent financing deals create," writes Pozner:
> Private-equity firms, enticed by promised returns, might demand rapid rollouts of AI products, rather than ensuring their orderly and safe development. Portfolio companies of private-equity firms may embrace AI tools not because they are needed but because adoption is mandated by their owners. Consultants may favor one set of AI models based on the subsidy instead of the merits.
>
> If guarantees and subsidies are major factors in the rapid adoption of AI tools, investors should be skeptical of AI companies' revenue projections. Many of their customers enticed by consultants will stop paying full price when the financial incentives are gone. Many of the portfolio companies of private-equity firms could back away from selected AI tools once these joint ventures expire. The challenge with evaluating these AI financing deals is the lack of transparency. At present, AI vendors don't separate revenue driven by subsidies or joint ventures from standard sales.
>
> The lesson from the telecom debacle is that financial engineering can obscure, for years, the difference between real customer demand and demand driven by incentives. When AI companies begin to finance their own product distribution, guaranteeing returns to investors and subsidizing sales, it's a signal for investors to dig deeper.
Investing in an AI company? Ask what percentage of enterprise revenue is coming from subsidized channels or joint ventures, Pozner suggests. And the renewal/retention rate for customers not supported by subsidies or joint ventures...
[1] https://www.wsj.com/opinion/can-investors-trust-ai-sales-figures-c60c46bf
[2] https://www.slashdot.org/~destinyland
[3] https://mitsloan.mit.edu/faculty/directory/robert-c-pozen
[4] https://en.wikipedia.org/wiki/Robert_Pozen
[5] https://amzn.to/4cWCYWJ
Who cares? (Score:1)
by Qbertino ( 265505 )
Those absurd sums are just booking entries from the war-chests of megacorps. If there is an AI bubble and it bursts tomorrow, normal people most likely will barely notice. The corps themselves will likely barely notice, since it's money (bits and bytes on HDDs) that has been lying around already and that they had to spare.
The other day I subscribed to Cllaude. (Score:1)
by serifs ( 1417537 )
Before I used free Internet version. Now I am working with it. If you some change in the existing code you need to describe it in detail, which takes time. It is not worth for small changes. It is best when you want something new, such as a new report, and there is similar thing as an example.
Of course not. (Score:2)
by devslash0 ( 4203435 )
What kind of a question even is that?
Everyone knows that most of AI "sales" numbers come from bundled, unwanted and inseparable installations.
AI will create a ton of jobs (Score:2)
All the vibe-coded slop .. instead of buying enterprise software .. it will just get vibe coded by the IT department. Think about that .. instead of buying a license for Photoshop a design company can just vibe code a photo editor that has what they need. "create a full featured photo editor with some custom features like ..."
AI will create new jobs and opportunities.
Re: (Score:2)
> All the vibe-coded slop .. instead of buying enterprise software .. it will just get vibe coded by the IT department. Think about that .. instead of buying a license for Photoshop a design company can just vibe code a photo editor that has what they need. "create a full featured photo editor with some custom features like ..."
> AI will create new jobs and opportunities.
You're assuming that cart will still need a horse.
Why the hell would I bother with asking AI to build a photo editor and then hire a photo expert to edit photos (a.k.a. that “new jobs and opportunities” part), when I can just ask AI to edit the photo?
Yes. It will get that good. Because we’re demanding it to.
Yes. That means unemployment. Not opportunity.