2025 Review and Top 5 AI, Automation & Transformation Predictions for 2026

Kind: captions Language: en Ladies and gentlemen, welcome to the digital leader show where we talk key issues and news at the intersection of business and technology in hopes of making you a better digital leader. Hosted by Dan Goodstein and Herpa AI, a professional association, media, and peer research network providing education, networking, and advice to over 130,000 global members on automation, enterprise AI, and digital transformation. We're live Wednesdays at noon Eastern, 9:00 a.

m. Pacific on LinkedIn and YouTube, and the audio recording is available wherever you get your podcasts. And now, here's your host, Dan Goodstein. Hello everyone and welcome to the digital leader show.

Today we're discussing 2025 recap and predictions for 2026 plus headlines for digital leaders. My co-host today is Chris Serdaka AI senior analyst, award-winning author and former White House chief transformation office adviser partner for digital transformation at Gartner and AI practice lead at EY. Chris, good afternoon. >> How are you, my friend?

Can't believe the year's over. >> We made it. >> More or less. >> Kicking and screaming.

Still have jobs, you know. But it was uh it was a year, man. >> It was. Yeah, it's uh it's been crazy.

We'll see how it wraps up. But >> yeah, it's uh last show for us for the year. Uh we want to talk about what we expected to happen this year, what happened, what didn't happen, um and uh what we're seeing for next year. So, uh if you're like, well, really should be everybody who is not completely 100% sure on what's next, uh uh stick around.

But, um lots going on. And uh before we jump into that, let's uh quickly go through uh this week's headlines. They seem to be pounding down the door at Open AI for partnerships and investment. The two big stories this week, uh, Amazon is supposedly in talks to invest about 10 billion dollars, uh, in Open AI.

Um, and, uh, alongside that, they just closed, Open AI just closed a deal with, uh, Disney, a $1 billion deal to license Disney uh, IP to uh, Open AI whilst they are suing Google for copyright infringement. I absolutely terrifying. And then I I I saw some post on LinkedIn today and I'm not going to confirm if it's accurate, but they're saying that the daily expenditure by OpenAI is about 150 million. I don't know if it's that much, but if that's the case, a billion dollar deal gets you a week.

Um, so I if that's the case, their partnership people have got to be really busy looking for other people that are going to throw a mill a billion here and a billion there. Sooner or later, it adds up. >> Yeah. you know, there's been this, you know, we and we've talked about it too because it seemed that way, right?

This AI arms race. And in a lot of ways, you know, it's it still is. But, you know, it reminds you of uh sometimes uh that co-opetition thing works better as a collaboration than as a as a as a competitor. you know, Amazon largely uh seen as kind of behind uh on the AI race and uh not really uh coming uh coming to fruition.

The the you know, the Alexa devices and and their capabilities not coming to uh fruition. Um but you know, you still have AWS, which is the platform for which a lot of this stuff is built on. Um, and now this. So, uh, interesting.

The the the, uh, Disney thing is kind of freaking people out a bit. Um, mostly I think in the, uh, you know, the Hollywood world. You know, there was part of the, um, dispute, contract dispute last year, uh, was about whether or not you could use AI, you know, someone's likeness, you know, an actor's likeness. um uh via you know AI and and create it via AI.

Um this particular deal saying this is only going to be for not not for likenesses for more characters but still uh some some Hollywood folks uh sounding the alarm. I I think that's to a certain extent when you um what would be the analogy like a a cattle rancher watching his his cows get off the farm and like running away over the hill and now you're willing to negotiate on the price of beef. Um so you know I think it's safe to say that Disney's likenesses and so forth are showing up throughout all these AIs and I see memes on this stuff every day.

So, you know, you the notion of protecting IP under a corporate umbrella like Disney is is pretty much gone. And so, you're you're trying to monetize what's left of what little is left of your position on the case. So, you know, kudos to them for that. But, um, I think to a certain extent, the horse is out of the barn and, you know, there's not much point in closing the door at this, you know, now.

>> I I hear you and that was my first reaction, too. But, a billion dollars is some hedge, man. That's a big >> Well, yeah, but I mean, isn't that what they're paying for like a movie these days? You know, some of their more recent movies are up there.

Um, >> yeah, it's it just seems like a big number to us mere mortals, I guess. >> I Well, exactly. You know, to the earlier comment, a billion here, a billion there. Eventually, you have a country.

Um, and and we're we're spending money on this AI stuff like it's like it has no value, strangely enough. And so, how where does it end up not having a lot of value? Um it it's interesting to see how all companies the one thing that's happening from all this is that it's massively disrupting everybody's business model and they have to rethink um who are they what are they what's their value proposition and and your point about Amazon I think is very interesting while they may not have been leading in AI there's no question that they've been leading in automation their services are amazing their their products are are fantastic and they just didn't they lay off like 50,000 people this year or something like that.

>> Um, through automation, not necessarily AI, but automation. So, I would say that they're they're focusing on actually improving how they operate and their operational efficiencies as opposed to just technology adoption. >> Yeah. And uh, you know, you know, the the the back to the AI arms race thing, you know, the people that are are sounding the alarm uh, you know, around that are getting more fodder, right?

Just just more consolidation. um uh here uh Google you know is up like 60% in 2025 even while some of its uh uh competitors have been you know down or up and down. Um, and I think if you would have, you know, if you would have, uh, looked at the so-called so-called AI arms race four or five months ago, I don't think you'd have Google as the winner. But, um, uh, it looks like, uh, at least investors feel that they are accelerating past some of their, uh, uh, competitors.

So, um, interesting they're kind of breaking from the pack. >> Well, and and I think to an extent that's a question of focus. Open AI seems to be chasing the technology for the sake of the technology, right? We want to be the first and bestest in AGI and so forth where I think Google appears to be much more pragmatic.

How can we use this technology to get better results? How can we use this technology to improve our business? And that's reflected I think in the business results and hence their stock price. So um the the bet the farm on the technology approach that Open AI because what's what's the business case for Open AI?

I think they're still struggling themselves to figure that out. Whereas Google, you're getting better search results. You're get as as a consumer, you're getting better search result. As a business customer, you're getting better search results.

So, I I think that Google's has a more pragmatic approach potentially. >> It makes sense. I I I should have seen it sooner, right? I mean, that the biggest challenge with all these things is always adoption.

We're seeing it, right? We're seeing, you know, huge and I'm I'm jumping into our 2026 stuff a little bit, but you know, we're seeing huge interest, but not not as huge of of adoption or at least adoption at scale. So, you know, here's a player that's already embedded in some of this stuff. them and Microsoft right are already embedded in in the way you work the workflows where you know as good as a technology is if you have to change the way you're doing things if you have to change your workflows and disrupt uh things it it sounds better sometimes than it is well and then there's adoption and then there's application right so I I saw something posted earlier today where um Microsoft is is kind of rethinking how they're going to make co-pilot work because there's adoption Lots of desk lots of people have it turned on on their machines, but there's very little application.

There's very little use. And a lot of that quote adoption was I don't know if you noticed, but when they turned that on in your latest update of Windows, it was just automatically turned on and you are automatically were forced to start paying for it. So part of the adoption numbers are it was defaulted to on and until you go in and shut it off, you're going to be paying for it and it looks like you're adopting it, but are you actually using it? their their their usage numbers are extremely low and shrinking, which is yeah, two two not very good signs for for whether or not it's going to be useful to their customers.

And politicians uh weighing in, Bernie Sanders called uh I think just this morning uh for a a nationwide pause on AI data centers to quote, "Let democracy uh catch up." and and meanwhile Trump has just signed an executive order banning uh states from regulating uh AI uh companies. So um you know a little bit of I think concern a little bit of uh potential you know power control who who who has the uh who has the uh the ability to regulate this stuff. Um but either way, um they're seeing this thing just, you know, getting away from them.

>> Uh that feels a little bit like, you know, shortly after the Hiroshima bomb dropped, maybe this wasn't a good idea. Um yeah, because so we completely unconstrained and unraigned AI for about two years and now we're like maybe maybe we shouldn't be doing this. Um I I genie out of the bottle at this point. So the the extent to which the technology is going to lead to AGI, I think if this particular mathematics approach will get us there, it's going to happen.

Um I don't think this mathematic approach transformers will get us there. But you know, totally who who knows what's happening in the labs that are six months away from being revealed. You know, I always try to keep that in mind. Um but for Bernie Sanders to step forward as some kind of expert in AI governance and so forth, I find that to be pretty interesting.

I wonder if he like has a phone. Um he might. You never know. Uh and then and you know Trump blows like the wind in the in the Sahara.

You know, you don't it blows this way in the morning and that way in the afternoon. You never know what you're going to get. So, um when I was in Mexico a month and a half ago and they're asking me, you know, as Mexicans, what should we do about AI regulations? And I said, take a siesta.

Just wait, right? Because as much as, you know, Canada's going this way, China's going that way, America's going another way. Um, if you just be a little bit patient, you're probably going to have the best of all worlds, uh, once everyone else figures out the wrong path to take. >> Yeah.

I mean, if you go a little deeper into, and I, you know, it's easy for us to just kind of skim through headlines, right? But if you go a little deeper into the Bernie Sanders comments, you know, the the the objection, at least one of the objections, uh, or concerns is, um, the the impact on, you know, the workforce. If you look at some of the the job numbers we talked about a couple weeks ago, right? There's, you know, one of the uh pieces of you know uh you know that you can that you can glean out of that those numbers is that you know AI is is and we've talked about this right AI is making it more difficult for entry level workers, younger workers to enter the workforce.

And so, um, you know, his concern is that it becomes, you know, a benefit just for the, you know, ultra wealthy, which obviously gets into the political side of things. But, um, you know, the the the Trump, uh, you know, wanting to, um, stop states from regulating it. How do you feel about that? You So, if you agree that there's got to be some regulation, you know, do you agree with it being, you know, federal versus state or do you think it should be both?

It's well I mean it is a huge challenge to you know the fact that you know well we're a democracy well we're a republic and we're a federated republic. So I mean it's it's that the way we often position it isn't actually correct. Um I I I suspect that that's something that's going to raise to the level of of the Supreme Court. At some point it's going to elevate to there.

Um and then um it's not unlike the arguments in the 1850s over slave rights or or freedom and so forth. So, you know, we're we're coming to that level of discussions and I think your point about Bernie being more concerned about the impact on society is absolutely critical. You know, job numbers the last several months are atrocious. And I think partially AI is being used to cover for a lot of layoffs and so forth that are taking place.

Um but the acceleration of technologies has always displaced workers. Um but usually that replacement took a long time to to happen so people could adjust. Here this technology is potentially replacing might workers who went to college dedicated decades of their lives to being trained in an expertise and now you're eliminating them in in the remainder of their lifetime they're not going to have the ability to reskill rescale. And it's one thing if you're doing that to manual labors at the very bottom of society.

If you're doing it to upper middle class and now I'm knocking you off of your point in the social ladder, that's what leads to revolutions. And so, you know, uh Bernie is not incorrect in worrying about the social disruptions and political disruptions that are going to be caused by that sort of technology innovation. >> Yeah. Yeah.

And I you know I I I I think I actually you know and and who knows the ultimate motives which is which is my concern but I I on it on its face I think I agree with the you know with with Trump's sentiment on this which is yeah this thing is complicated uh you know already um to now have to bifurcate by state what the regulations are in each state I think is just you know it's an un unreasonable uh burden. Now I I don't know if I necessarily want um you know some of the people in in the current administration based on what's happened with the FCC and other things uh to be the regulators.

So that's that's always the concern, right? But um you know theoretically I I I think I like the because it it affects it affects trade at a global level, right? The relationships with um with China and others and and the trade wars and the tariffs, right? It would be difficult.

I think it puts it puts the US at a competitive disadvantage if you know every state is treated almost like another another country from a trade standpoint. >> Well, and we have lots of precedents of this to look at whether it's you know corporate uh or the fuel economy ratings for cars. You know, California had different ratings in other states and then other states did the same which makes it much more complex to build a car. recently with CCPA, California's Consumer Protection Act, which is all about information privacy and so forth, and now other states are doing the same thing.

So, you're absolutely correct. We've seen where if state by state they're regulating and they have different requirements, it becomes just in untenable to manage it all and incredibly expensive to ensure compliance. But I think you and I have said on the show before, the worst thing you can do is is create a set of rules or laws that no one can adhere to. Um, and so if you're going to make it so complex that it's not navigable, then everybody's just going to ignore the regulations and that's that's, you know, chaos.

You don't want that either. So, >> well, and then the other question is is is enforcability, right? I mean, we have, you know, you know, technology and AI and the internet is not really limited by the geographical bounds of a of a state. So, you know, one of the stories I want to talk about as we get into the new year is some of the laws coming out around um uh age verification.

And I know right now the conversation is largely about access to pornography, but there's bigger ramifications of it. Um, and and already, you know, the, you know, some of the people that are lobbying, which again are or pornography companies, but they they have a valid point, I think, which is, you know, you're only going to regulate the top three websites because you're not going to be able to regulate the long tale of of of small mom and pop, you know, uh, companies. So, does it even do anything, right?

If I stop Google, you know, from doing certain things in certain states, does that actually allow the rise of a Google alternative that may not be able to be regulable? Is that a word? Made that up. >> Um, well, they either passed or they're talking about passing a law in Australia that says if you're under 16, you you're not allowed any access to social media.

Good luck enforcing that. >> And the loopholes are already out there. There's people with apps that are changing people's faces and it's already happening. We'll get I want to talk about that maybe uh maybe our next show.

But >> yeah, I mean so which is a fair point. The more you try to enforce something that is has a degree of inevitability, the more you're just building a market for innovation around how to circumvent. Um and is that really where we want to drive most of our innovation, which is trying to get around the law? Arguably not.

So we we we have this tremendous in our in the last 15 years or so we have this tremendous disconnect between what we want to have happen and the unintended consequences of it not going the way we wanted to. So we have all kinds of things that we've done that with social consciousness and so forth where we had the best of intentions. We really want to, you know, have diversified workforce and etc., etc.

, and use technology for good, but everything comes at a cost. And we and we under, it seems we we we don't even understate the cost. We we ignore the costs and then it comes back and bites us and we're kind of like, oh my gosh, you know, we had no idea that that would be a problem. Um, and so I I think we're going to hurt learn some hard lessons on a wide range of things that we've done um with good intentions across our society and and it's going to come back to bite us kind of hard in the next few years.

Um, but you know, I think we're probably we're probably due for that lesson, as uncomfortable as it will be. So, let's segue into uh our main topic today, which is hey, it's the end of the year and uh you know what happened this year? It's, you know, it's it's usually kind of when I when I think about what happened, you know, in in the course of a year, Chris, I normally, you know, have like three or four like foundational like the legs of a stool analogy, right? Like there's two or three different technologies, two or two or three things that that happened.

I mean, is is it is it safe to say they were all AI or or maybe a better way of saying it is that, you know, AI was like as pervasive as the internet? Like for it to be its own thing almost doesn't make sense. It was really more about AI embedding itself into everything else uh over the course of the last year. But what are your what are your thoughts?

I think so. AI, a year ago, we were talking about this about what was the future of AI. And a year ago, I'm pretty sure I said 2024 was the year that people were going to make plans for AI. 2025 is when they were going to try to execute the plans.

And 2026 is when they're going to try to clean up after the plans didn't work out. And I think that was fairly prophetic. And and it's not because I'm smart. I've just I've seen this cycle so many times over the 30some years.

So I think that's largely how it played out to me. I think that AI is is proving to be a forcing function in a whole bunch of other things. And I think there's a whole bunch of other things that happen in the world that are actually much more impactful and they were kind of covered over by AI. And by that I mean, you know, the war in Ukraine, the creation of bricks, the ddollarization of of of the pet of uh oil in the world, that the end of the Brentton Woods uh agreement from the early 40s that set up the last 80 years of how our world even worked.

Those to me are the much bigger, much more impactful changes that took place. And they were all kind of sidestepped uh because of, you know, AI AI this AI that. Um, I think they all merge in the coming year. Um, so the coming year is gonna be even more interesting this year, but I I think that we were very distracted by AI and and there's a lot of other important stuff going on all around the world.

>> So, how about from a >> Yeah, go ahead. >> No, please. I was just gonna ask you so so from a you know, from a headline standpoint, sure. You know, from a technology standpoint though, like I I I I and I haven't seen it this year.

I usually look at it before we do this show, but like you usually, you know, the all the analyst houses have their, you know, top five or top 10 things, top 10 technologies to look out for um you know, for next year. And and the ones that I did see, you know, for this year were more about AI in healthcare, AI in this industry, AI in that space, AI takes right versus distinct technologies. Are are there others that you're tracking though? the the one that I think might be the most impactful um medium and longer term is if SpaceX goes public which is now being discussed um and in not so much the launchers because you know the rockets are important but I think I think Starlink is probably one of the most disruptive technologies in the world um where and I worked on the internets in this in the sky in the early 90s which didn't work because there wasn't a market for it you didn't have a tick tocker trying to shoot videos on top of Everest.

So they needed a good connection in in the early 90s. Now you do. And so before they were trying to launch the infrastructure, before there was a demand and now there's demand and the infrastructure is going to take off. So I I view that I view Starlink as potentially one of the most disruptive technologies and and projects out there and that's going to be reflected in in SpaceX's IPO which potentially going to be over a trillion dollars for the first time ever.

Um, and for, you know, for people that are uncomfortable with with Elon just because he's Alain and he's kind of crazy and so forth and being the richest man in the world, the dude's about to triple his wealth. So, Lord only and and and have this internet and space connecting again. My my own company is trying to uh get the last two billion people into the digital economy. Starlink is one of the ways that they're going to do that.

And I think that having the last quarter of humanity added to the the digital economy is probably one of the more disruptive things that we're going to see in the coming decade. >> Yeah. So you have you have this kind of this idea of the edge or like the you know the edge of the network right that you know hasn't really had you know access in areas. It's gotten better right with 5G and are we up to 6G or 10G or what what's the next thing?

>> 6G is starting to come out. Yeah. >> Yeah. So, it's getting better, right?

More bandwidth, more access, but there's still it's it's amazing to me like where I live, I live in a suburb of New York, an hour and a half outside of the city. Um, and our coverage here is 96% awesome, but of course, my house is in that 4%. So, you know, there's just certain areas where I get not bad ser zero service like like uh middle of Africa kind of service. Um, and so I got a Starlink and uh it's amazing.

I get I get better uh service on that Starlink than I do with sometimes the routers in my house depending on where I am in the house. So um but that's you know that's a first world problem that I have. But for to your point right you know for all these you know edges you know people but also devices right that don't normally have access to you know maybe a mobile network. So, you're spot on.

And not to promote my own company, but this is what my company's trying to address for for for you. If we if we put you on 6G, I mean, you're already digital a digital native. You're digitally connected. You're your whole life is digital.

Giving you better bandwidth is is not going to be as impactful to your life. I mean, it's so cool, but it's it's a it's a nice to have. It's a bit of a luxury. We're talking there's people out there where if you can lower the cost to deliver by 10%.

Now there's another half billion people that have no access right now and you're giving it to them. So the analogy I was given the other day is it's like you know Ford want Henry Ford wanted to make the Model T so everyone could have a car and that's great but you also had to invent gas stations and motel and service centers. There's all the other infrastructure that you needed so that the car could truly be disruptive if everyone had one. and and and so getting people getting people that are already 98% digital 1% more digital isn't as impactful as taking the people that are completely unconnected and plugging them in.

And I think that that is why um what Starlink is is bringing to the to the table and frankly that's like I said my own company that's what we're trying to tap into because that's going to be one of the more disruptive things that happens. The the other one which you know we often overlook because so much of our attention has been you know software automation but um the the other thing I think to look out for uh in 26 is robotics physical robotics um to your point one of one of the things that uh I guess it's under the Tesla I'm thinking about Elon Musk SpaceX I think it's under the Tesla uh organization where you know his comp plan is tied to I forget the number But, you know, building like a si a silly amount of humanoid robots like like like the stuff of Hollywood fodder, right?

Like a not not an army per se, but like basically an army of uh of of robots. That kind of jet ski jetson's uh you know analogy we've been telling everybody for the longest time that that's not what we're talking about. That's what we're talking about now. Well, into our earlier discussion, you know, Amazon wasn't really as big on AIs.

All these other companies, yeah, but they've been automating like crazy. You know, their 40 or 50,000 layoffs is because of automation, not AI based, but almost certainly robotics. And they're they're talking about uh robotics for Amazon eliminating or preventing was it 600,000 jobs in the next 5 years. So, to your point, that kind of automation I think is is going to be explosive.

um and much more impactful potentially than than AI right now. And and so the interestingly and I also saw this other pretty famous economist talking a couple days ago about how the Ukraine war is is part of what's representing this step change in our society. World War I and the Crimean War, they were the first industrialized wars. That's where, you know, you were building millions of b billions of bullets and millions of artillery rounds and dozens of battleships and stuff.

what's going on in in crime in uh Ukraine right now is the first automated war and where you know they're building a million drones a month to to you know you you make one drone to blow up one soldier and then you can't even step outside of of a the drones now are flying into the trenches and finding where the people are hiding and and we're learning a new method of warfare uh in real time and those innovations as you know war often does at least a bunch of innovations that and lead to civilian innovations.

And I think we're going to see more and more of that. So if you want to see where the potential disruptions are coming from, look at the innovation coming out of that horrifying war. But we're going to see how a lot of roles that are have strictly been human in the past are now going to be automated away on the civilian side. I saw a video yesterday um and I'm I'm trying to remember what the application I think it was an industrial uh industrial manufacturer and it was a it was a truck which was not a well not a self-driving truck but it could have been right a self-driving truck um with a flatbed and a robot in the back holding up and launching a drone right um and and the and the goal the Tesla goal of this uh this is the Optimus robot the the goal is is is like I said, Jetson.

They want this thing in your house, cooking, cleaning, doing household stuff. Um, in theory with the same capabilities that you'll be able to get from Chad GPT or Google Gemini or whoever wins that race, um, built in, right? Well, and and there's the um, and if you want to start getting humanist and philosophical, there's an old saying that, you know, every empire is built upon the backs of slave labor. this is non-human slave labor to a certain extent and maybe this is something we need to get to the next level of economic development until all the robots unionize and then who knows what happens then um you know it's amazing how we humans our history keeps repeating and repeating and we keep refusing to learn the lessons of the past so edge computing robotics what else Chris anything in the the blockchain crypto world >> so interestingly and and you know that that's where I'm I'm currently positioned.

So I I think yes, I think that there there's a new renaissance globally around crypto and blockchain. I think that it's um it got a really bad um bad publicity for about 10 years, but I think more and more nations are now heading in that direction. Um digital payments are becoming more legitimized. more more countries are eliminating their regulation around this thing which I think is probably a good thing.

And then the the entire central banking um western way of managing finance that we've built for a quarter of a millennia I I think has outgrown itself to a certain extent. um seeing bricks come up and and you know it's not there yet but bricks as a as an alternative to the existing um sort of global monopoly on on managing finances. It it's going to be very disruptive and it's going to take a while to play out but I think that you're going to see a lot more movement into cryptos.

Fiat itself is kind of losing its its ability to be useful. Uh, and so people are looking for alternatives and I expect to see alternatives, but it's going to be very disruptive as we get there. I again I I don't think you can understate the importance of the petro dollar deal ending earlier this year uh and its impact on global trade. >> The other uh the other I'm thinking about the trends that we've talked about in the past that you know were not center stage this year.

the the the other one uh was kind of the the the metaverse, right? Um it sounds like the Facebook Meta Zeta Zuckerberg is finally kind of disbanded at least most of the uh metaverse um unit at uh at Meta with the technology he renamed the company over. Um, so it seems like at least for now I don't I don't see that being on the near-term radar. Although there are still more goggles and and and and glasses and devices like that being brought to market, but the the focus seems to be more uh augmented reality versus uh virtual reality.

>> So you're you're you're making me tiptoe in a territory that I'm not allowed to tiptoe into, but yeah. Yeah. I don't write off don't write off meta type stuff yet. >> Um, but I can state that augmented reality is is where you're potentially going to see a lot of of um new innovation and new products and services.

And interesting when I was I was at HP 10 years ago and we had um Arasma which is augmented reality. We had really cool use cases a decade ago. It just all kind of died off a bit. Um, so I it might almost be like a third third wave of of enhanced or augmented reality coming on.

I think you're going to see that in the coming year to two years. And again, I can't get too deeply into it, but I think there's some significant innovation coming there. Um, and then actually you're getting into a ton of issues around privacy and that sort of stuff. Um, um, we used to call people with Google Glass one point, you were a glass hole if you walked around with that because no one wanted to be filmed.

if if if everybody's wearing it now and cameras are kind of perpetual now, maybe we've gotten past that social stigma and it's going to be more adopted. So, um it's interesting you brought that one up because I I think you're going to see a bit of a of a renaissance in that space in about a year to a year and a half. >> Yeah. By the way, I I've always I' I've never been critical of the augmented reality space.

I I've been I've been critical of the virtual uh reality space just because I I think you know the the ramifications of it >> um outside of gaming I always felt you know gaming and maybe um training you know uh you know that that kind of thing I I always felt was kind of over uh overblown like why would I want to turn we're trying to get to a world where you know we can connect our remote or hybrid workforce into a more connected workforce. Why would I want to change my image into an avatar and live in this fake world?

Um, you know, in in the business world, right? But but augmented absolutely, right? If to the extent that I can combine um, you know, data, AI, even digital twin with my physical being and and create a a truly hybrid experience. Beautiful, right?

Um, it's funny that you bring up gaming because I was thinking the same thing. I mean, the way metaverse was is, yeah, you're entering a giant video game and how am I going to get something productive out of that? But again, the amazing use cases I saw a decade ago were like you looked into an engine bay and you would get a real-time video feed of how to check your oil or something like that. I mean, really useful stuff.

I think initially it was a we we still have a hardware problem um which is we're on the verge of solving in many ways but then interestingly enough that then leads to a content problem because then the next question is all right if we have really innovative ways of doing augmented reality in your in your field of vision where's the content coming from are we back to getting humanbased content or are we then going to AIS and what happens when the AI is wrong what happens if the AI screws up the instruction then you're under the hood of your Toyota and you pour the motor oil into the the uh windshield wiper thing because it it made the wrong content.

>> So all of a sudden to our earlier discussion where you know Disney's signing away their intellectual property rights to open AI isn't that terrible. If augmented reality really takes off, maybe we're back to needing really smart, really creative, really talented, and really intelligent humans to create the content for augmented reality >> and because you have some of the components of it right now, right? You have the ability with a mobile phone, right? you you know like the the big advanced thing that I did this year was I went from you know all textbased prompting for AI where I just assumed that the to like you know taking a picture and saying okay you just asked me to change the whatever coil on my pool heater thing I don't know what that to like oh that thing over there is that is this and that you know AI being able to say what what part is what right um so but it's still clunky right now all of a sudden you have glasses on and you're looking at the thing and it's got an arrow says change that thing over there.

Um different world and that's a consumer example but imagine that in in field work, field technicians, medical field, right? Right. Goes on and on. >> And then and then the problem there is is you get into the selection bias thing.

Maybe maybe the AI gave you the right instructions 99% of the time, which would be very high for AI right now. um the 1% of the time someone dies or the 1% of the time you cause 10 you destroy the motor because you put the wrong fluid in the wrong spot and now you have a $10,000 engine replacement, right? When we hear about something going wrong, it's going to be sort of catastrophic use cases and then we humans are terrible at that. As soon as we hear about the awful thing that happened, we we call for a ban on this or a ban on that.

So, so I think the challenge you have there is that sort of selection bias problem where we're only going to hear about it when something goes wrong and inevitably something's going to go wrong when we're counting on AI to come up with the instructional content for doing that sort of stuff which is sort of the killer app for using these things. Um, I I I know there's always the idea of using it as a travel guide and you're in a new new location and you're walking around and it's telling you about this building and that building and you know this statue or monument and maybe go around this corner and there's a there's a great restaurant there.

Well, as you're doing that, you step out on the street because you're not paying attention. You get run over. All right, lawsuit. Or you you it it guides you down a path that's like ridden with crime and you're mugged.

Lawsuit. Um, so so every every new technology solve some problems and bring some new ones. And you always have to ask yourself, what are those potential new problems and how do we mitigate them? We're we tend to be very bad at that lately.

>> Chris, what uh what surprised you this year? What did you not expect >> in the world of technology or business? I'm guessing we're saying >> yeah. >> Um that's a really good question.

I would say probably the longevity of the AI, the the degree to which we're stretching it out um and and still giving it more chances. We're we're like really quadrupling down on this particular technology. I was I was on a call earlier today and there must been like five people that were talking about small language models, right? And so they're now taking the LLM that's out there and they're making it just for cancer research or just for this or just for that.

And I've been a proponent of that for the since LLM first came out. Um, so the fact that we're still dumping immense amounts of money into the big bang. We're going after AGI, I I think that's probably the thing that surprised me the most. We're really we're really quadrupling down.

We we we're taking the we're taking the the the uh mortgage of the farm or the deed to the farm and we're putting it on the on the blackjack table and hoping that we get one more good spin. That's uh that's the part I think that's most surprising to me. Actually, actually then there's a second one. I don't know if you've noticed this, but the the the the subscriptification of everything.

Have you seen where like um like Volkswagen now in their cars, if you want to have your your steering wheel heated, you have to pay like five bucks for the weekend. No way really. >> Or or if you want to increase the amount of horsepower for the weekend, it's like 40 bucks and you get 50 more horsepower. >> Um and this this was a trend I think started in a lot of the electric electric cars like Teslas, like you pay a little bit extra and you get a and and they're even talking about having to subscribe to turn on the radio in your car.

And so that that whole um you'll own nothing and be happy that is is moving very quickly. And the notion of having to subscribe to everything and and everything is is optional and you don't and you literally don't own anything. I I think that's one of the things that's a disturbing trend. >> It's disturbing and it's it's it's you know, it's challenging because it's become so compartmentalized now.

you know, if if I could and I know there's a you know, there's a there's a there's a pitch here for well, you need competitiveness for price uh competitiveness, but you know, I'm just I'm sick of having 14 apps. I mean, I don't know how many times how much how much money I spend on streaming services and my kids say I want to watch X movie and I can't freaking find it. Like, I'm so done with that. Give me bring me back to cable.

And I'm a technology guy. I was the first one to cut the cord. I'm like, give me the cord back because I just want it to work. Like, I'm maybe I'm at a point in my life where I'm not, you know, thank God, counting the tens and $20 a month, but like I just want it to work.

I don't want to be subscribed to every freaking service and still not be able to get the content I want because some, you know, small company that hasn't done a deal owns it. U but you're right, even uh a lot of the self-driving um tools now, uh software now, I think Ford, Lincoln, uh Tes, it's a subscription uh now. It's not just part of the car, it's a subscription. >> Well, there's another side of that, too, where Yeah, I have a bunch of movies like on my on my uh Apple TV, but old movies, I'll go back and rewatch them and I'll notice that they've changed the content.

Like, there's aspects of the movie that that have changed, and a lot of it's very subtle, but I'm going back to buying Blu-rays and DVDs for movies. A, they're cheaper and B, you know, there's at least a better chance that they haven't altered it over time because if if you're not really paying attention, entire chunks of movies and stuff from, you know, old content can be changed. You wouldn't really recognize it. So, I I >> You'll like this, Chris.

found this guy on YouTube that um he compares the the version of the movie that's on streaming to the original script and he tells you what's missing >> and uh one of them was really angel one of my favorite you know Christmas movies of all time national lampoon's Christmas vacation um he talks about this what you're talk and he said actually even the movie version with the extra features the DVD version that had the extra features and they keep re-releasing it every year with a different cover, whatever.

He goes, "It's the same movie, though. It's not the same movie that aired on cable because of something with the I don't know if it was the uh I think it was a timing thing with commercials or whatever, but for whatever reason, there's like uh three or four scenes in that movie that aired originally um on cable TV, but are not in any of the on demand or or DVD versions. Um it's just a per it's just the matrix, man. We're all living in the matrix.

And I notice it even like subtle things like coloration if if you really pay attention to it. It's it's it's interesting. Um and the more you digitize stuff you do and again back to blockchain. That's one of the things I like about blockchain is it gives you ability to see has this thing been altered because we're going to lose more and more ability to to check that even physical books.

I'm back to buying more physical books. I I you know, is my Kindle version really the same as it was 20 years ago? If I'm buying a copy of 1984 or something like that, I think it's I think it's important. >> So, I'm trying I was trying to think about as I was thinking of that question for you, I was thinking about how I would answer it.

You know, what what surprised me about this year? Um, I think I'm surprised at how many people are surprised like like you know like and maybe it's just talking to you uh every week, Chris, but you know like you know that that that old adage like we've seen this movie before like I feel I feel it. Maybe again, maybe it's because we do this every week and not everybody has the time and the opportunity to like look at trends and compare them to the but like it just seems like I saw I saw an article this morning on what they were calling shadow AI >> like did we not coin that like like six months ago >> even on the show we talked about you know uh you know the cloud computing the AWS the shadow IT thing happening again with AI Um, you know, you talk about the jobs thing, you talk about the, you know, the the companies.

I mean, some of these things we've been talking about for a year or two. If you're not paying for it, you're the you're the product, right? All all this stuff. And it's just it's just happening at a scale.

I think what's different now is that the AI thing has just accelerated the conversation behind some of this stuff. But the principles are not new. It's the same principles just, you know, on steroids accelerated. >> Yeah.

harder to hide. It's more obvious. >> Um >> as you, you know, kind of like you say as the matrix on once you see a little tear in the matrix, it's kind of it's you can no longer ignore that it's out there. And and I think some of that too is um you know, we're in a very disruptive world right now.

Um and there's degrees to which certain things can't be hidden anymore. Um and I think that we're experiencing a degree of that. and and and not not to take a position one way or the other. I think that the extremes at either end have both gotten so extreme that it's now everyone's kind of like whoa, none of that makes sense.

Um so I think there's a degree of um of that sort of either awakening or there's a point at which a lot of these extremes that have existed in our society for a while are no longer ignorable. And that's back to my earlier saying about the unintended consequences. I always go back to my early engineering days of, you know, as I I was I was the mission success guy. You get us to Mars, I make sure we don't blow up along the way.

And I'm seeing a whole lot of the, oh, we might blow up along the way kind of stuff moving to the four now. We're all saying maybe we should have thought some of these decisions through a little bit more carefully before we went there. So, so let's let's wrap on on AI because it obviously is the you know the the most transformative thing or at least one of them um that we haven't talked deeper uh about just because we talk about it every week I think. Um but so as you as you look at into 26 Chris um what trends within AI do you do you see coming?

>> Um I think there's going to be a great rationalizing like everybody, oh, we're gonna we're going to eliminate all of our customer service reps and just use AI. And then I think there's there's going to be like the great hire back, right? So, we eliminated 80 people and oopsie, we, you know, we needed to have at least a few humans still at at the helm. So, maybe we hire back the best eight.

So, I think you're actually going to see a little bit of that. A little bit and you already see something like in marketing departments. We're coming, we blew away our whole marketing department, now our marketing sucks. Bring back at least the best three.

So, I think there's going to be a little bit of that going on. I think um the we're going to be forced to accept that not all use cases were good use cases, that it's it's a very good tool for very specific things. And then again, this a great rationalization, right? The companies that quadrupled down this year doesn't really work the way you wanted it to, but we're going to we're going to figure out where it does work and adopt it.

Um, and so I think you're actually going to have an an improvement in the percentage and rate of success. There's just going to be a lot less attempts, right? Um, and we saw this like with RPA. Everybody had RPA projects and like not very small percentage of them actually worked and thereafter it wasn't as big of a deal, but people we finally figured out how to use it and where to use it and then it was it was more successful.

It just wasn't as noisy and there wasn't as much of it. So, I think we're going to see a little bit of that sort of rationalization in the AI marketplace or somehow someone breaks AGI and then we're all probably dead. So, yeah, I so I think I agree with that. Um, you know, mine were going to be um agentic AI, right?

So, I think we're at that point where you know, just like we did with you mentioned robotic process automation, we kind of evolved from task automation to process automate. I think we're getting there with AI this year, right? I think we're getting from, you know, single prompt, you know, one-way, you know, task um to, you know, workflows, agentic. Um I think we're getting to I I I I remember saying this too.

You know, you're right. Um uh you know I said to somebody on the phone maybe 3 four months ago like remember that term narrow AI like despite what what what open AI and Google may or may not be trying to do for the rest of the enterprise world that's not in the technology business I think narrow AI I think I think AI um uh you know custom fit AI for certain situations you know I'm I'm doing a lot in the sales and marketing space um uh you you mentioned what you're doing. So I think I think purpose-builts AI for specific domains.

Um and then um I think that we are clo my third one is I think that we are close to business model shifts. Um I I think that you know if you look at you know and this is probably a show in itself right we can discuss and debate but um you know if you look at the workforce numbers if you look at you know the AI hiring if you look at um just some where some of the technologies are and you know some of the conversations I'm privy to at the center of the association here. I just feel like there's organizations now because of political pressures, because of economic pressures, I think we're at the point where they say, you know what, >> we're done trying to band-aid that old business model.

We're going to go to a new business model. And you're right, it might be, hey, oops, we shouldn't have done the whole contact center, but then there'll be like a a moderation, right? We went from one side of the pendulum where we had way too many people that we didn't need. we over to okay, we underhired and it's all AI and then we settle somewhere in the middle.

U but I think part of that will be we don't need to do things the way that we used to do them. Um and I think I hope I think that's a positive thing. So I'm going to say I I think and I I hope that that's what happens, you know, because this this current state where we are of just fear and um denial, I I don't think it's productive. as you always say, you said before, you know, it's it's already out of the bottle, right?

We're not going to squeeze it back in. So, let's let's deal with the reality and how that adjusts and and have the hard conversations if that means the workforce is going to go down or change or you need to, you know, retrain yourself and you have six months to do that before I give you the pink slip. Let's have that conversation. >> Hey, every technology cycle in my entire career, we overhype it, we catastrophize it, and then we just adopt it.

and and you and you and I talk about this as RPA like five, six, seven years ago after that bubble kind of burst that we were talking what's going to happen next. It's just going to be integrated into the operating system and it's not going to be a standalone thing anymore and people are just going to have little bots that run. They don't even think about it. >> Yeah.

>> And I have those running in my Outlook right now. So I I think the agent to your point about agentic little bits of AI being here, there's very likely. Um, but I think we're we're just we we've gone through the o to your your idea of the pendulum. We've gone through the super hyper uber over optimizing it and now we have to go through a degree of catastrophizing it and realizing, okay, it wasn't all that we thought it was and then we just get down to business and we make something useful happen with it.

>> Um, cloud computing, mobile phones, blockchain, you name we do it with every technology. So, >> exciting times. Uh Chris, thank you so much. I hope this was helpful.

Anybody who's watching, if you if you need some more hands-on advice, recommendations, uh workshops, please reach out to us or go to herai.comanalysts. Uh if you're on the sales side and you're looking to accelerate pro uh your your market uh promotion, your pipeline, we've uh launched a market accelerator program. You can check that out at herai.

comarket accelerator. We will not be here next week. Merry Christmas. Happy holidays.

And uh happy new year to everybody. Chris, happy new year, buddy. Happy holiday. >> June 26.

Take care.