'No point overhyping AI': Zoho founder Sridhar Vembu sounds alarm, says AI is losing steam

Zoho Corp’s founder and chief scientist, Sridhar Vembu, believes the artificial intelligence (AI) hype is losing steam, with corporate customers and analysts growing increasingly sceptical of recent developments.

In a post on X, Vembu pointed to reports of Microsoft cancelling US data centre leases amid oversupply concerns and CEO Satya Nadella’s cautious stance on overly optimistic projections for AI—especially when it comes to Artificial General Intelligence (AGI).

"One fact about the recent AI hype is that corporate customers and analysts are not terribly excited. They are in a 'prove it to me' mode, as they should be," Vembu wrote, adding that overhyping any technology is counterproductive, even if its potential is promising.

Citing early signs of the AI bubble deflating, Vembu highlighted Microsoft’s pullback and Nadella’s warnings about unrealistic expectations surrounding AGI, which some believe will surpass human intelligence across all dimensions.

"I am in the camp that overhyping anything is a bad idea. I am personally enthusiastic about some technologies but I will not overhype them.

There are some warning signs of the AI bubble deflating:

1. MSN: "Microsoft reportedly cancels US data center leases amid oversupply concerns"

2. Satya Nadella cautions against overly optimistic projections about AI, in particular about AGI (AI that is super human in every dimension)," the tech guru and entrepreneur wrote on X.

He also cautioned against the misuse of AI in marketing, warning of “AI slop,” where content becomes recognisably machine-generated, eroding trust and authenticity.

Despite his reservations about the hype, Vembu remains optimistic about AI’s practical applications. He sees immense potential in security threat analysis, pattern recognition across sectors like finance, law, medicine, and engineering, and AI-driven assistance for programmers.

“Autonomous AI agents are like self-driving cars—don’t get too taken by the hype, but engineers in the trenches are making real progress,” Vembu concluded.