Three Years In: GenAI's Discontinuity Proven in Silicon, Unproven in Revenue

How the market's split verdict reveals we're exactly where discontinuities always pause before their exponential phase.

Photo by Joyce Adams via Unsplash

Three years after ChatGPT’s launch, the market has rendered a split verdict on the generative AI generation.

Traditional software companies are hemorrhaging value. Infrastructure and compute have captured trillions in value. Hyperscalers are deploying +$400 billion annually in CapEx with methodical conviction. Productivity gains are nascent. New revenue streams - not counting hyperscalers - are still absent.

Is the market confused? Are hyperscalers spending too recklessly? Where is the revenue that justifies this infrastructure build-out?

What might look irrational can be understood through a critical lens: Discontinuity.

The absence of exponential returns and transformation of these markets is not evidence of failure, but rather the reality that we are precisely in the phase of discontinuity where doubt precedes the exponential curve. Recognizing why requires an understanding of discontinuity as an analytical lens.

Discontinuities don’t follow linear adopt…