The Labor-Shaped Hole

Uber torched its AI budget in four months and can’t find the returns – even as you pull $250-a-month value out of a chatbot. Meanwhile the RAM boom is pricing the poor world out of smartphones, every

Dear Friend,

Last week I had the chance to sit down with the amazing Gero Hesse, founder and CEO of Embrace, the German HR-Tech company, to talk about OUTLEARN. Talk about an industry which is being affected by AI – there isn’t a HR function in a big(ger) company anymore which isn’t running AI software to help with sifting through resumes, interviewing candidates, or help with the onboarding process. Here’s the interview.

And now, this…

P.S. Lessons in history – here is The Guardian, 19 years ago, about MySpace: “Will MySpace ever lose its monopoly?”

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Headlines from the Future

Where Are the Returns on AI? Against the backdrop of the AI investment boom, we are starting to see the first signs of companies struggling to justify their AI investments (specifically, token spending). Recent headlines, such as Uber’s COO questioning the value they are getting out of their AI investments (“Uber burned through its entire 2026 AI budget in four months. Now its COO is questioning whether it’s worth it”), are starting to reverberate through industry after industry. The specific metric being questioned is the connection between token spend and features shipped (which is a fair point):

“That link is not there yet,” he said. “Maybe implicitly there’s more that is getting shipped, but it’s very hard to draw a line between one of those stats and ‘Okay now we’re actually producing like 25% more useful consumer features.’” […] “If you’re not actually able to draw a direct line to how [many] useful features and functionality you’re shipping to your users, that trade becomes harder to justify,” Macdonald said.

And it’s not just Uber – Nvidia (the company which is synonymous with AI) is facing similar existential questions:

These developments also suggest that the economics of replacing or augmenting human labor with AI may be more complicated than some early forecasts originally implied. That echoes what Bryan Catanzaro, vice president of applied deep learning at Nvidia, recently said in an interview with Axios. “For my team, the cost of compute is far beyond the costs of the employees,” he said.

For us this points to a fascinating conundrum which we have been looking into (from a different angle) in our last Tuesday Briefing – while individual users often get massive value from AI through their $20 to $250/month subscriptions and their ability to freely explore the uneven boundaries of the technology, companies find themselves in a situation where they struggle to fit AI into “labor-shaped holes.”

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The RAM Crisis Latest Victim: Cheap Smartphones. It is one thing to see the price of your state-of-the-art smartphone go up; it’s a whole different thing to see whole swaths of the population in low-income countries being priced out of the market completely. One of the more hopeful developments in tech over the last twenty years was the massive democratization of Internet access through the availability of cheap smartphones. Travel to any low-income country and you will see masses of people being able to access the Internet using sub-$100 smartphones. The AI boom led to a steep increase in the price for RAM chips, which in turn led to an equally steep increase in the price of (low-end) smartphones – leaving many people without the ability to purchase a smartphone and hence not being able to access the Internet.

So the trend of the last few decades, of consumer electronics getting better and cheaper every year, faces a sharp reversal: the poor world is now entering a smartphone crisis.

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What We Are Reading

Final Frontier for Meds? UK Startup Sends Drug-making into Space Cancer treatment just got a cosmic upgrade. Turns out the best pharmacy is 250 miles straight up. @Jane

Why the Vatican Invited Anthropic to the Pope’s AI Encyclical Presentation Pope Leo brought together the Vatican and Anthropic around a shared concern that AI systems risk being shaped purely by economic and competitive incentives rather than human values. @Mafe

The Great Flattening, Part 2: The Data Is Worse Than the Anecdotes It’s not just the LinkedIn posters: Companies and brands are converging on the same blandly smooth, maddeningly generic AI voice. @Jeffrey

Architects of Innovation: How Ics Power The Modern Tech Organization Insightful piece on how many orgs still operate like information and decision-making should flow vertically. Reality is, the people creating the most leverage are moving ideas horizontally across the business. @Kacee

The Cost Of Ever questioned what it will cost you over your lifetime to upgrade your perfectly fine iPhone every year? Or any of the myriad of other decisions we make every day? Here you go. It’s worse than you might think. @Pascal

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Down the Rabbit Hole

🎓 After graduation speeches around the country have consistently missed the mark on AI, Steve Wozniak shows us how it’s done: Apple cofounder Steve Wozniak got cheers, not boos, after telling students they ‘all have AI – actual intelligence’

🧠 FOMO is real: Fear of missing out is linked to hypersensitive brain reactions to digital likes.

😱 That is a very poor choice of words: Bank boss sorry after describing workers as ‘lower value human capital’.

🤦 When search becomes a prompt: You can no longer Google the word ‘disregard.’

📹 Departing Meta staffer posts biting anti-AI video internally amid mass layoffs.

💸 Here’s the tracker: Is AI Profitable Yet?

💾 The RAM shortage is (very) real – and it shows: Memory has grown to nearly two-thirds of AI chip component costs.

💍 The headline here isn’t that there is a new, thinner Oura ring, but the fact that Oura (the health- and wellness-tracking company) has integrated GLP-1 (Ozempic) tracking into its app: They’ve finally made the Oura Ring smaller and lighter.

😋 Yum! There is now a small language model which takes food ingredients and creates recipes based on them. Epicure: Navigating the Emergent Geometry of Food Ingredient Embeddings.

👦 The terrifying rise of schoolboys making AI girlfriends.

🪫 This hits home – when we were at Singularity University, cold fusion was “ten years away.” Why Is Fusion Energy Always ’10 Years Away’?

↗ Dive into the deep end: Access our complete collection of 2,800+ radical links.

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Should We Work Together?

Hi! I’m Pascal from radical. This newsletter is our labor of love. When we’re not writing, we run radical, a firm that helps organizations navigate the future without the “innovation theater.” Most leaders want to seize new opportunities, but they hate endless strategy decks that go nowhere. At radical, we don’t run “projects”; we build your organization’s internal capacity to handle disruption and change. Our goal is to make you future-proof so you can stop reacting to the world and start shaping it. If you’re interested, let’s jump on a call to see if we’re a good fit. Click here to speak with us.