Pluralistic: Why businesses lie about AI

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Why businesses lie about AI: Humoring the boss all the way into bankruptcy.

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Why businesses lie about AI (permalink)

Neoclassical economics assumes rationality. The corollary of, "If you're so smart, why aren't you rich?" is "you're rich, so you must be very smart!" Thus it is that many people assume that if powerful, well-compensated CEOs insist that "AI is changing everything," well then, AI must be changing everything.

But the evidence for this "changing everything" thesis is thin on the ground. Despite a global mania that has reduced the real, pressing need for digital sovereignty to the imaginary need to create "sovereign AI," no one can really articulate the case for "sovereign AI." If Donald Trump ordered Big Tech to turn off all of your country's chatbots tomorrow, nothing would change. Every one of your country's ministries and corporations would chug on with nary a hitch. Households, too, though perhaps a few of the younger members of those families would have to do their own homework again.

(Contrast this with what would transpire if Trump directed his tech giants to switch off your country's Office 365 access, or to brick your Android and iOS phones, or to killswitch your John Deere tractors. Your country would effectively cease to exist. If "digital sovereignty" means anything, it means doing something about this urgent fact):

https://pluralistic.net/2026/06/18/their-trillions-our-billions/#eyes-on-the-prize

The world is full of people who insist that "AI is changing everything" but who – when pressed – have to admit that what they mean is that they're pretty sure that AI will change everything. Eventually. After we allow it to consume all the planet's energy, carbon, water and financial resources.

Maybe.

(They're pretty sure.)

One person who's had a lot of opportunity to observe the shear between the stated business/AI situation and the real business AI situation is Nikhil Suresh from Hermit Tech, a consulting firm of "radically ethical data wizards" (that is, tech consultants). Suresh reports on his experience talking with hundreds of executives (and, more importantly, their subordinates) about what (if anything) AI is doing for business in an essay entitled "AI Mania Is Eviscerating Global Decisionmaking":

https://hermit-tech.com/blog/ai-mania-is-eviscerating-global-decisionmaking

Suresh has a good track record of writing trenchant, frank criticism of AI. You may know him from his 2024 essay, "I Will Fucking Piledrive You If You Mention AI Again":

https://ludic.mataroa.blog/blog/i-will-fucking-piledrive-you-if-you-mention-ai-again/

Or possibly from his "Contra Ptacek's Terrible Article On AI," a stinging rebuttal to Thomas Ptacek's widely read "My AI Skeptic Friends Are All Nuts":

https://ludic.mataroa.blog/blog/contra-ptaceks-terrible-article-on-ai/

While those are important pieces of critical AI realpolitik, none of them have the heft or urgency of "AI Mania Is Eviscerating Global Decisionmaking," whose thesis can be summed up with this passage from halfway through this 6,000-word article:

[W]e’re facing a coordination problem around executives being honest around the AI gains they’ve witnessed – if they co-operate, they keep their jobs. If they defect, they will possibly be fired by their embarrassed peers (who have now been implicitly called liars, cowards, or incompetents) and then replaced with someone that will toe the line anyway. If they could all admit the truth at once there might be some hope, but there is no way to coordinate that event.

In other words, corporate leadership is starting from the premise that AI has (or will) radically change the business, and they're working backwards from that premise to find the evidence to support this article of faith.

In support of this thesis, Suresh cites "hundreds" of conversations with execs and employees who spoke to him on the condition that he would "file the serial numbers" off their stories. These, combined with his own experience consulting for large, multi-billion-dollar companies make it clear that "AI mania" is an absolutely justifiable label for the state of AI in corporate circles.

Here are a few highlights from this morning's read – moments where I had to look away from my screen and read out a passage to my wife so that we could share a "holy shit" moment.

A person worked for a division that "pivoted" to re-engineer its software to create interfaces that support AI agents. When it became apparent that only ten users had touched this expensive new technology, they "pivoted" again to support "agentic workflows." Why did they double down on AI agents after discovering such yawning market indifference for "agentic"? "Because every company has to do something agentic now."

Suresh describes this as a literal religious mania. In the 500+ employee businesses Suresh studied, the only people who were promoted – or even spared from being fired – were people who professed "religious declarations of faith" about "the transformative power of AI." Employees who voiced honest, informed objections to AI in the workplace were passed over for promotions or targeted for layoffs.

This has created a situation in which everyone – "boards, executives, employees, vendors, consultants" – has a strong incentive to lie about how much AI is delivering for their companies. Suresh says he's seen announcements from publicly traded companies about their AI triumphs that he knows for a fact never took place.

Suresh says he's never seen a successful enterprise AI project: "Every single one – we have seen 0% success in a year and a half." Not one of their clients would face a business challenge if OpenAI went out of business tomorrow. The problem most companies struggle with is that they're "terminally bad at running software projects effectively." Adding AI to the mix doesn't solve this problem – it just adds a whole new range of ways that software deployment can fail.

Chatbots don't help. The internally facing chatbot that's supposed to help employees figure out how to navigate the business sucks because it is only as good as its training data – the business's documentation of its own processes. Businesses suck at documenting their processes. Customer-facing chatbots also suck. They either can't solve your problem, or, when they seem to solve your problem, the "solution" goes nowhere.

Suresh recounts his sole positive customer service chatbot experience: a Mitsubishi chatbot with a natural sounding, responsive voice politely took all the details of an automotive failure and promised him a callback. That callback never came, but Suresh is certain that Mitsubishi has logged this as a chatbot success story, even though the experience convinced him not to buy a Mitsubishi car.

Suresh and his team at Hermit Tech now have a policy of not even asking about ongoing AI projects. They've learned that by the time an AI project has begun, no one will discuss it honestly until it reaches a crisis point.

Suresh says he frequently encounters people who reflexively utter the AI catechism: "AI is changing everything." But when he presses these people for details, they admit that their organization "does not currently use LLMs for anything, and indeed, that they cannot name a single thing that has changed other than they get some use out of ChatGPT."

This shear ("AI is changing everything"/"Well, OK, we're not using AI for anything") is so extreme that Suresh once met an exec who confessed to crafting an AI-centered AI strategy for a $2b/year business, even though that exec "had never even used ChatGPT or any AI tool in their life."

Some people have privately admitted to Suresh that they've embraced AI in order to earn a career-boosting corporate reputation for "thought leadership." But many other people (especially nontechnical people) sincerely believe that AI is about to "change everything." As Suresh says, if you're in business with a liar, you might be able to reason with them in private – but you can't reason with a true believer.

The true believers are in charge. Suresh points out that it would be very weird for the CEO of an engineering firm or a hospital to mandate "specific procedures or building techniques without explicit agreement from the professionals on staff." But when it comes to AI, business leaders will confidently demand that the skilled professionals who perform the business's core functions use AI, even if those professionals don't think it will help.

As an aside: I remember the dotcom era, when the business press was full of articles about the conflict between CEOs and a new workforce that demanded the right to use the web on the job. Today, the business press is full of articles about the conflict between the workforce and CEOs who demand that they use AI.

Suresh describes workers who feel they have to "AI wash" their work: "They just do the work, the same way they have for decades, and say Claude did it." To add verisimilitude to this sham, they write circular processes in which one chatbot prompts another, and then the process repeats itself in reverse, for the sole purpose of consuming AI tokens to score a high rank on corporate "token leaderboards."

How to account for this wildly, expensively irrational corporate leadership? Suresh places the blame in the hypnotizing, mesmerizing power of the AI demo. For example: Hermit Tech is often engaged to set up a database product called Snowflake for its customers. Snowflake has a useless, expensive AI bolt-on called Cortex, that Snowflake itself describes as being 92% accurate under ideal circumstances (that is, at least 8% of the time, it will mislead you, perhaps very badly).

Suresh describes sales meetings with execs who were lukewarm on the idea of retooling with Snowflake, but who were very interested in Cortex. Against their better judgment, Suresh and his team provided them with a Cortex demo, carefully explaining that this AI tool could not satisfy their requirements. Without fail, this resulted in the previously lukewarm customers insisting that they be allowed to purchase Cortex immediately. Sales prospects who'd been unmoved by a pitch for new technology that would result in millions in savings were hypnotized by demos of a product that was described as unsuitable and unreliable.

To their credit, Hermit Tech refused to sell these customers Cortex, and stopped doing Cortex demos altogether. Suresh describes the experience of "the total 180°, that shift from ice-cold to red-hot buying frenzy" as "deeply unsettling." What's more, the Cortex demos that Suresh and co performed were, by his account, pretty uninspiring. The thing that these demos had going for them is that they showed AI actually doing something marginally useful, to execs who'd already spent millions on AI without having anything to show for their money. The spectacle of AI that does something galvanizes corporate leaders who feel like they're the only bosses who can't find a revolutionary use for AI in their businesses.

This is the situation up and down the corporate org-chart. Suresh has a reader whose title is "Head of AI" at a billion-dollar firm who tells him "their job is totally fraudulent but it was the only promotion pathway remaining at the organisation." This exec is hardly alone. They're part of a cohort of executives at companies t

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