AI has been challenged in the last year by overexuberance and by the failure of LLMs to scale.
Its challenge in 2025 is to deliver the productivity it promised.
To track that I like to look at the biggest enterprise Software as a Service (SaaS) players, ServiceNow (NOW), Salesforce (CRM) and Adobe (ADBE). They were quick to claim leadership in AI, quick to deliver what they said were AI tweaks, and quick to advertise themselves as leaders.
The December quarter shows they may also be overbought. Growth disappointed. NOW and CRM are down on the year. Adobe’s numbers come out later this month.
But delivering on productivity can’t mean firing artists, coders, and operators standing by. If it does, the whole AI complex must go down. If we want growth from AI, these companies must deliver growth to their customers.
Productivity is measured in hours or dollars spent to perform a task. It can become a financial spiral, unless companies find new things to do. Tech productivity should be a measure of growth, not savings.
Analysts are currently in “excuses” mode for all three stocks. ServiceNow fell hard after earnings, and analysts are now noting its growth in AI exceeded growth elsewhere, thus it should accelerate. Maybe. Or maybe customers, like vendors, are just calling existing service contracts “AI.”
This is going to be the canary in the coal mine for the whole market. If the productivity customers get from AI isn’t plowed into expanding businesses, into doing new things, the AI boom will quickly bust.
