AI’s reputation is deteriorating while the technology advances. On Wednesday, the National Republican Senatorial Committee sent a memo to major AI firms warning that US data centres are damaging the party’s prospects in a crucial Ohio election. Simultaneously, Pew Research released a study showing American unease is rising. Fifty-two percent of respondents said they are “more concerned than excited” about AI’s increased role in daily life, a figure up from 37% in 2021.
A recent CNBC poll of 18- to 34-year-olds found that a majority do not trust nine top industry leaders to “act responsibly” regarding AI. A May Economist/YouGov poll indicated that over 70% of Americans believe AI is advancing too quickly.
Discontent is appearing on balance sheets. The Wall Street Journal reported that tech companies face a public relations crisis over plans to build AI data centres across the US. Firms are now agreeing to sweeten the deals by offering job guarantees, clean water investments, and other local perks. One agreement included $50,000 bonuses for teachers in a Louisiana parish.
The underlying sentiment is that consumers do not see how AI improves their lives yet they must absorb the costs. For an industry that raised hundreds of billions on the promise of AI’s inevitability, this souring public sentiment is becoming a business problem, not just a PR debacle, and industry leaders are noticing.
Many consumers now view AI in narrow terms, such as chatbots or search experiences like the now AI-transformed Google. They see AI features infiltrating everyday products, from email to TVs, whether they wanted them or not. They view AI as a tool helping kids cheat in school, including at the college level, raising questions about the value of a degree. They also hear of AI bots training on piles of intellectual property belonging to others so AI can create art, videos, music, and writing — things that have historically been the output of humans.
It is no surprise then that AI appears to be facing more consumer backlash than other transformative technologies did, like the iPhone, the personal computer, or even the internet itself, at similar stages of adoption.
Yet some remain surprised by consumers’ reaction. They assumed AI’s adoption would lead to acceptance, and its ubiquity would ultimately have consumers feeling positively about the technology as it became part of the vast majority of tech products and services.
Instead, consumer trends point in the opposite direction. Young people, in particular, are showing interest in adopting retro technology, ranging from dumbphones to point-and-shoot cameras to tape decks and CD players. AI-free, algorithm-free classic iPods are selling for top dollar on eBay. So-called “grandma hobbies” like quilting, knitting, jigsaw puzzles, cards, and games like Mahjong are suddenly everywhere. In-person meetups and activities, like run clubs, are winning out over online dating.
Some in Silicon Valley may think this stems from a messaging problem: that perhaps executives need to explain AI better to consumers so people can fully understand its benefits.
The reality is that consumers understand AI well enough as it is, but do not think the trade-offs are worth it. When the upside offered is not automated jobs with increased pay and reduced workweeks, but instead the threat of job loss, paired with AI features consumers find far less compelling — things like summarised web pages, or chatty TVs — skepticism hardens.
There are those in the industry waking up to this.
On a recent podcast, Airbnb CEO Brian Chesky acknowledged that the AI backlash is real, and that it is largely tied to the fact that the industry is not shipping products that “regular people” like.
“I think part of it’s a narrative issue that we’re not talking about AI correctly,” Chesky said. “But part of it is we need to actually be developing more products that just regular people can use and say, ‘I love AI because AI allows me to have a doctor on demand and I can’t have that. I can’t afford that.’ And so I think we need more regular things.”
Even Anthropic CEO Dario Amodei, one of the industry’s most prominent leaders, admitted in a post on X this week that negative public perception of AI is a “big problem” that is fundamentally a “crisis of trust.” He said people do not trust companies, governments, or the tech industry, as they “suspect that we are cooking up some new way to screw them over.”
The solution, he said, was to deliver on AI’s promises — for example, curing cancer.
“I think by far the most accurate criticism of AI companies, including Anthropic, is that we haven’t yet delivered on our big promises to benefit the world. That is totally on us,” he noted.
What it means
For people making things, the shift is clear: the era of generic utility is over. If an AI tool does not solve a specific, high-stakes problem like curing cancer, it will struggle to gain traction. The market is rejecting abstract features in favour of tangible, affordable solutions that deliver immediate value.
