To The Moon

$Microsoft(MSFT)$ was formed in 1975, and the PC revolution started only a few years later. But it would take 24 years before half of the homes in the U.S. had a PC.

In 1994, the first online payment was made, but it was 12 years before $Shopify(SHOP)$ was founded.

$Amazon.com(AMZN)$ launched in 1994, and even today, only about 17% of purchases are made online.

$Apple(AAPL)$ iPhone launched in 2007 when nearly everyone already had a phone in their pocket, and it still took six years for half of Americans to adopt the smartphone.

Consumer adoption of products often takes longer than we think or remember, which is both an opportunity and a threat to investors.

This week, I think it was a critical moment in that consumer AI adoption journey. $Meta Platforms, Inc.(META)$ Muse — the AI chatbot that’s a ready-made assistant with connections to all of your data — launched, and by all accounts, it’s great!

But will people use it?

And when?

The Muse Moment

Until now, AI hasn’t exactly been accessible to regular people. If you’re a coder, AI is a revolution.

But if you’re a regular person just trying to make it through every day, why do you need to create your own apps or have AI make a presentation for you?

AI as a glorified search engine is cool, but not a reason to change how you live, and certainly isn’t worth a trillion dollars in capex.

Muse is the first time I’ve felt like the AI product was built for regular people. It’s — dare I say — Apple-like. 🫢

It starts with a simple question:

And I wanted to make a quick, simple automation that would be useful for my family.

Check my email for new events that come in, particularly for my kids’ sports.

Great!

I have a problem.

I get too many emails.

47,379 are currently sitting unread in six inboxes on my phone, and there are at least another two inboxes on my computer.

I miss things.

AI solves that problem.

It puts the important stuff on my calendar so I don’t miss anything!

And it did so flawlessly!

I looked up my son’s team, went online, found the schedule, and made a calendar event. It was brilliant!

Side note: It actually does go online through a built-in browser. It’s kind of strange and creepy to watch, but shows how the AI is working to find the info you’re looking for.

I’m not ready to have AI shop for my toiletries or change my flight, but this is the kind of solution I can see using more and more.

I’ve started taking recipes I find on Instagram and pasting them into DoorDash to create a grocery list.

Maybe a one-click option is next with a Muse integration?

I can envision the incremental technology advances this will bring forward that will make my life easier.

The question I have is: Will people use Meta’s Muse?

Disruption, Evolution & Immitation

I’ve been struck by two things observing AI develop:

1. Everything is imitated by competitors extremely quickly.

2. The mega-tech corporations with the most money and data always seem to catch up quickly and surpass startups.

On #1, I think Muse is a great app. And I was struck that the two connections I made (mail and calendar) were both connections to $Alphabet(GOOG)$ properties.

Google could do everything Meta is doing within Gemini tomorrow. It probably does, I just haven’t set it up.

And Google also happens to own the operating system for more than half of the world’s smartphones.

Instead of opening Meta, Android users could just talk to Gemini.

Apple is in a similar position. And it plays nicely with Google on iOS devices (pays for Google to be the default search engine and Gemini powers Siri).

“Hey Siri, go through all of my emails and make sure all of my kids’ activities are on the family calendar.”

I can see how Meta just paved the path, and Google/Apple will fast follow and eat their lunch.

On #2, OpenAI and Anthropic are still leaders in AI, and they’re maybe technically startups (although they’re funded by big tech), but we’ve seen dozens of AI companies fall by the wayside.

Remember when Lensa went from zero to millions of users overnight? Perplexity had its day in the sun. And right now it’s Instinct, an AI assistant that Silicon Valley is over the moon about.

But these fads rarely last because everything is copied by a company with more money, users, and data.

AI is being sold as disruptive, but I don’t think it is to big tech.

AI is an evolution of existing technology and will simply use our current communication tools (email, text, Slack, etc) as a database from which to pull information.

Imitation happens faster than ever in a world of AI.

Maybe what’s old is new again, and in a few weeks, I’ll give up Muse (like I did Facebook years ago) for Google and Apple properties I already use?

The Trust Question

As much fun as I had playing around with Muse, there was a problem I should have anticipated…

My wife wasn’t happy to have a Meta-owned AI looking through my emails for my kids’ events.

It’s a fair critique.

Meta isn’t exactly trustworthy when it comes to personal information, especially kids, and AI seems to be able to find anything anywhere.

Some people won’t have a problem with this. They put their kids’ faces on Facebook and share photos on Instagram.

Some people try to hide all of their personal data, even if that’s not really possible.

We don’t post often, but it’s probably enough of a digital footprint for AI to know more than we would like.

And that’s true for everyone.

So, when people do decide to trust AI with data and connections to their vital apps and messages, who will they trust?

Apple and Google stand out to me as likely. They already have all of our information on the operating system of the phone or computer you’re reading this on right now. Mail, messages, and more are only a few clicks away.

Meta has a lot of data, but it also has trust issues.

Will OpenAI and Anthropic be more like Apple and Google or Meta for new users?

I think the latter, given how untrustworthy Sam Altman and Dario Amodei are just listening to them.

Another vote for the status quo winning.

Why It All Matters

I think it’s clear that AI investment is holding up the economy right now. Consumer goods, restaurants, retail, they’re all struggling. And inflation is eating into consumers’ spending power and causing higher interest rates, which suppresses housing.

So, the AI trade is incredibly important to the market.

And spending is skyrocketing.

But most of the AI business today is dependent on enterprise spending. And not just enterprise spending, but the big spenders in the enterprise.

According to Ramp, the top 1% of token users spend nearly $8,000 per month per employee, more than 10x the top 10% and more than 500x the median company.

But big spenders are getting more budget-conscious. Spending was down last month and that’s a theme I heard across conference calls in Q2.

The next big opportunity is the consumer. But what’s the consumer AI business model?

Agents, shopping, something, something 🚀 ?

And if consumers do adopt AI in larger numbers, what’s the moat?

Is Google’s data a moat?

Is Meta’s user base a moat?

Are Apple’s devices a moat?

Time will tell, but I think we’ve begun turning a corner in consumer AI.

The future isn’t building custom apps or running reports; it’s making people’s lives a little bit easier with AI.

That’s worth exploring, and there’s a business there. But it may take longer to get from here to “there” than people think.

History says this isn’t a technology shift that will happen overnight.

For the first time in a while, I’m excited about how AI could make the lives of the average person better.

Until it destroys us all. But that’s a story for another day.

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