Is AI a bubble, or just a brutal sorting mechanism?

Welcome back! It’s only Monday and we’ve already got plenty to catch you up on. Former Google CEO Eric Schmidt has something to say about the AI hype cycle: This isn't a bubble. It's a reckoning.

While some headlines scream frothy valuations and model madness, Schmidt’s take is that the current moment isn’t overhyped, it’s underprepared. Enterprises building defensible moats around proprietary data and practical applications are slotted to win. The losers are those who thought a few prompt engineers would save the quarter.

Let’s get into what this means for your strategy, your hiring roadmap, and your future board briefings.

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Former Google CEO says AI isn’t a bubble, just a brutal filter

The former Google CEO, Eric Schmidt, is calling it as he sees it: AI is not some dot-com fantasy, but it is a massive shift in industrial power.

Schmidt says AI isn’t in a bubble, because bubbles imply eventual deflation. Instead, what we’re watching is more Darwinian: a tech transformation that will kill some companies and crown others, based largely on how well they deploy, not just adopt, AI.

A few sharp takeaways:

• “A bubble is something with no value.” Schmidt argues that the AI models themselves may be commoditized over time, but the real value lies in the proprietary data, integrations, and workflows that enterprises build around them.

• It’s not about having an LLM. Instead, it’s about what your LLM knows that no one else’s does. This means enterprise teams need to prioritize fine-tuning, vector databases, and domain-specific modeling over headline-grabbing model swaps.

• Moats matter again. AI-native companies that own their user data, vertical-specific ontologies, or real-time feedback loops are positioned to outcompete (and outlast) the tooling tourists.

How We See It:

AI (probably) isn’t a bubble, but a lot of the ways companies are using it right now sure look like one. Slapping chatbots onto a customer portal and calling it “AI transformation” is peak bubble behavior. But if you’re investing in automation that actually moves the needle, building models around proprietary intelligence, and redesigning workflows to scale with machine-human collaboration, then you're not inflating a balloon, you're laying a foundation. And if you're not sure where to start, we've got you covered.

Free Resources to Help You Get There:

• AI Readiness Assessment: Evaluate  and uncover your AI readiness score in under 15 minutes.

• Practical AI Strategy Guide: A 7-step playbook for high-impact AI adoption.

• Enterprise Guide to Securing AI Buy-In: cut through AI overwhelm and build confidence in your next move.

Enterprise takeaway: If your AI roadmap doesn’t include data infrastructure, cross-functional alignment, and change management across your org, not just IT, you’re in the splash zone.

News Roundup

1. “AI will replace recruiters and assistants in six months”
   The CEO behind ChatGPT rival Reka says AI’s biggest near-term disruption isn’t coding or content, it’s admin and hiring. That 6-month timeline might be aggressive, but the trend is real.
   Read more →

2. Yahoo Japan tells all 11,000 employees: Use GenAI daily or get left behind
   It’s the first time a major corporation publicly told every employee to integrate GenAI into their day-to-day. Ambitious or desperate? Maybe both. But it sets a bar.
   Read more →

3. Netflix starts using GenAI in production—yes, really
   From script polishing to background generation, the streaming giant is now deploying GenAI in actual shows and films. For Hollywood execs: meet your new intern. For enterprises: welcome to synthetic operations.
   Read more →

TL;DR:

• Eric Schmidt says AI isn’t a bubble, it’s a sorting mechanism. The smart money is on companies building around proprietary data and smart integrations.

• Yahoo Japan just mandated GenAI usage across 11,000 employees. This signals a cultural shift from "nice-to-have" to required literacy.

• Recruiters and assistants are on the chopping block. Admin and operations are next in the AI automation wave.

• Netflix is using GenAI in production. It’s no longer theoretical, it’s on-screen.

• Enterprise teams must act fast. Pilots aren’t enough. Strategic, organization-wide transformation is now table stakes.

Stay sharp,

Cat Valverde
Founder, Enterprise AI Solutions
Navigating Tomorrow’s Tech Landscape Together