AI’s Reality Check: Growth Is Real, But Not Linear

A recent report from The Wall Street Journal highlighted that OpenAI fell short of some of its internal expectations for user growth and revenue in 2026. In addition, ChatGPT did not reach its goal of one billion weekly active users by the end of 2025, instead finishing the year with an estimated ~800 million.

The report rattled investor confidence, particularly in companies whose valuations are tied to the assumption of sustained, rapid growth in AI infrastructure spending. Following the news, several AI-adjacent stocks declined, including:

• Oracle
• CoreWeave
• Arista Networks
• Applied Materials

This reaction underscores a key point: AI optimism is already embedded in many valuations. When expectations slip, markets adjust quickly.

AI Is Powerful—but Still Developing

None of this changes the fact that AI is already delivering tangible value across the economy.

Tools powered by large language models are improving productivity in real ways:

• Microsoft Copilot can draft and summarize emails and documents
• Meeting assistants automatically generate transcripts and action items
• Customer service chatbots handle routine inquiries like order status
• GitHub Copilot helps developers write and debug code

However, the broader economic impact remains less clear than the technology’s capabilities might suggest.

Despite measurable productivity gains, AI adoption has not yet translated into widespread labor displacement or significant cost reductions at scale, i.e. are the tools driving incremental revenue or reducing operating expenses?

The answers are mixed, which doesn’t invalidate the long-term opportunity, but it does mean the return on investment is still being established.

Growth Will Continue—But Not Smoothly

The use of large language models—such as those developed by OpenAI (ChatGPT), Anthropic (Claude), and Google (Gemini)—is almost certain to expand over time.

Revenue across the ecosystem should grow alongside adoption.

But investors should not expect a straight line upward.

AI will likely follow a more traditional innovation curve:

• Periods of rapid acceleration
• Followed by phases of digestion, reassessment, and slower growth

This kind of uneven trajectory is typical for transformative technologies.

Lessons From the Past

It’s also worth remembering that today’s leaders are not guaranteed to dominate tomorrow.

In the early days of the internet, search was led by platforms like AltaVista and Ask Jeeves. Both were eventually overtaken by Google, a later entrant that executed better.

AI could follow a similar path. Model leadership can shift, platforms can be disrupted and competitive advantages can erode faster than expected. It was only last year when there were concerns that ChatGPT was going to displace Google search, and now the concern has shifted to ChatGPT’s ability to keep pace with Google’s Gemini.

Investment Implications: Discipline Matters

A key takeaway is that while there will be many winners, not every company associated with AI will come out on top.

Investing based solely on “AI exposure” is unlikely to be a durable strategy. Instead, investors should focus on fundamentals:

• How does the company grow earnings?
• How will the company maintain its earnings power going forward?

Bottom Line

AI remains one of the most important technological shifts in decades. Adoption is real, and the long-term growth trajectory is intact.

But the recent data point on ChatGPT serves as a useful reminder: even transformative technologies don’t scale in a straight line.

For investors, that means balancing optimism with discipline and recognizing that in a rapidly evolving landscape, today’s assumptions can change quickly.

For informational purposes only. The information is not intended to provide specific advice or recommendations, and the information has been obtained from sources believed to be reliable. 

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