Sam Altman Admits the AI Industry Has Done "a Terrible Job" Explaining Its Benefits Amid Growing Backlash. Should That Worry Nvidia and Microsoft Investors?

Its enormous need for electricity, its massive physical footprint, and, most recently, concerns that it could inadvertently cause catastrophic problems have pushed the artificial intelligence (AI) business out of favor, along with leading AI stocks like Nvidia (NASDAQ: NVDA), Microsoft (NASDAQ: MSFT), and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL).

OpenAI CEO and co-founder Sam Altman thinks he knows why, too. In a recent interview with Bloomberg, Altman suggested the industry itself has done "a terrible job" of explaining AI's benefits to ordinary Americans. And perhaps he's right.

The question is: What does this mean for shareholders of the companies at the heart of the AI revolution? It certainly seems like a problem.

But it isn't.

Image source: Getty Images.

Users always eventually find the best tool for the job

Don't misunderstand. The artificial intelligence business has much to figure out about connecting with customers. In that regard, Altman is right -- the industry has done a terrible job of selling itself to the public. Blame the ambiguity of ChatGPT's and Gemini's interfaces, mostly. It seems too good to be true that these platforms can simply do whatever you ask them to do; a simple "getting started" guidebook would certainly help.

Trust the marketplace of ideas, though. The good ones always rise to the top, and the best ones displace the merely good ones. Consumers and corporations will eventually vote with their dollars for the best ones, but only after they organically see real value.

Think about Apple's (NASDAQ: AAPL) iPhone, first introduced back in 2007. It was far from the first smartphone, which was introduced back in the mid-1990s. It was the first smartphone to truly click with consumers for its ease of use, sparking a flurry of follow-ons that would eventually become an unexpected centerpiece of people's lives. Today, Pew Research reports more than 90% of U.S. adults own a smartphone.

The advent of Meta Platforms' (NASDAQ: META) Facebook is another example of a consumer-driven, organic mainstreaming. It wasn't the first social networking platform. That honor largely belongs to MySpace, which launched in 2003 with respectable early growth. Facebook simply surpassed MySpace's user headcount in 2008, despite only becoming available to users outside of universities and colleges in 2006. Users just liked it better.

The point is, people eventually embrace any and all useful technologies, even if they're poorly explained. Artificial intelligence is unlikely to be any different. It's just going to take some time, largely because most AI users will insist on learning to use the tech themselves at their own pace, as they did with the internet and computers. To this end, Precedence Research still predicts the global AI market is set to grow at an average annualized pace of 18.7% through 2035.

The more important question

This still doesn't answer another (perhaps more important) question. That is, which AI platform will most of the crowd end up falling in love with? That's also the norm for consumer-facing technologies. Again, think of Apple's iPhone, or Alphabet's dominant search engine, Google.

From this perspective, while the artificial intelligence industry as a whole will eventually draw a large crowd of regular users, one of these platforms will become the favorite. The others will end up like MySpace, Yahoo, or early smartphone pioneer BlackBerry (NYSE: BB).

James Brumley has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends BlackBerry. The Motley Fool has a disclosure policy.