Good morning,
Last week we mentioned a bank CEO using his AI clone to handle an earnings call. Things just got weirder: Berkshire Hathaway’s annual meeting Q&A was kicked off by “Warren from Omaha” — it was actually an uncanny Warren Buffett deepfake.
Fresh out of the BLS vault: consumer prices rose 3.8% annually in April, accelerating faster than expected to the highest level since May 2023. Energy accounted for 40% of the increase. Tomorrow’s PPI will also influence the Fed’s rate policy.
In today’s letter:
AI adoption increasingly relies on “the evangelist exponent”
The business flight routes hit hardest by surging fuel prices
“Pure manager” layoffs: how AI is reshaping middle management
LEADING STORY
Strategic partnerships and “evangelist” hires could supercharge AI adoption
Tom and Jerry style… Within a week of each other, Anthropic and OpenAI announced (separate) PE-backed joint ventures. In essence, both new ventures have the same goal: fast-track enterprise deployment of AI solutions.
Yesterday, OpenAI formally announced it’s launching the OpenAI Deployment Company, which will help companies deploy AI. The venture is in partnership with TPG, Advent, Bain Capital, Brookfield, SoftBank, and others.
Last week, Anthropic teamed up with Blackstone, Hellman & Friedman, and Goldman Sachs to launch an AI services company to deploy Claude across midsize companies.
Both ventures seek to help companies overcome the challenges of integrating AI into workflows, and will embed AI engineers into firms to help achieve that.
The Ramp AI Index shows Anthropic adoption surged from 24.4% in February to 30.6% in March, continuing to narrow the gap with OpenAI (35.2% adoption).
The exponential effect… It’s a smart play to partner with alternative asset managers like VC and PE firms, since they can encourage AI adoption throughout their portfolio companies. According to Ramp data, venture capital-backed companies lead the way in AI use with an 80% adoption rate. Private equity-backed firms are next at 64%. Everyone else: 45%
“VCs are functioning as a transmission mechanism for AI adoption across their portfolios through top-down directives, portfolio-wide deals, and the general cultural expectation that you should be using the latest tools,” said Ara Kharazian, lead economist at Ramp.
Adoption friction is real… the corporate desire to overcome it is realer. The AI push isn’t just coming from the labs: companies are increasingly hiring internal “AI evangelists” to drive adoption among employees. While these types of roles remain highly concentrated in tech, it’s certainly not only tech (see: Colgate’s AI evangelist).
The bottom line:
As the learning curve flattens, the adoption curve spikes… Whether it’s AI evangelists or lab-sponsored deployment services, the goal is the same: flatten the learning curve to adoption. As friction falls away, adoption is likely to spike. Since both companies and employees are influenced by their peers (desiring to keep up with or surpass them), the result could be exponential.
Watercooler Data
The fuel price surge is squeezing consumers and businesses alike.
New U.S. government data shows that airlines spent 56.4% more on jet fuel in the month after the Iran war started. Defunct budget carrier Spirit cited the “sudden and sustained rise in fuel prices” in its abrupt shuttering last month.
We dug into Ramp data to check in on fares paid by corporate across the 10 busiest U.S. business routes in Q1. What we found:
California corridors are getting hit the hardest: San Diego and Los Angeles flights to the San Francisco Bay Area are up over 40% each from last year. It’s not a coincidence: last month, California’s jet fuel supply dropped to a three-year low.
Trending in AI: “pure manager” layoffs
Tech Twitter’s been stewing over how AI may reshape middle management.
Coinbase CEO Brian Armstrong, in his viral post announcing a 14% staff reduction at the crypto exchange, announced the company would no longer have “pure managers.”
“Every leader at Coinbase must also be a strong and active individual contributor,” Armstrong wrote. “Managers should be like player-coaches.”
Armstrong isn’t the only, or first one, favoring this mindset. After Block cut roughly 40% of its staff in February, CEO Jack Dorsey espoused the player-coach shift. Other tech leaders have expressed similar preferences.
The discourse is heating up as companies cite AI in reorg decisions: total corporate layoffs are actually down 10% this year, according to Challenger, Gray & Christmas, but tech layoffs are up 33%. Last week alone, Cloudflare and PayPal both announced mass layoffs linked to AI.
Whether you believe that tech layoffs are a direct result of AI advancements or a convenient excuse, the management layer has already been shrinking for years.
That’s created a growing class of “megamanagers” with a greater number of direct reports. Gallup found the average number of people reporting to managers climbed from 10.9 in 2024 to 12.1 last year.
One of the downsides: managers may find themselves firefighting rather than focusing on the bigger picture.
Signals Shortlist
Data Byte
US firms are expected to spend $2,068 per employee on AI this year, up from $1,358 last year (Federal Reserve Bank of Atlanta)
🗓️ Leading Events:
May 12, Tuesday: April Consumer Price Index. NFIB Small Business Optimism Index. Earnings expected from Under Armour and Siemens Energy
May 13, Wednesday: Producer Price Index. Earnings expected from SoftBank, Cisco, Alibaba, and Birkenstock
May 14, Thursday: Trump-Xi summit in Beijing scheduled to begin. Advance retail sales. Imports and exports. Initial jobless claims. Earnings expected from Klarna, Applied Materials, and Foxconn
May 15, Friday: Empire State Manufacturing Survey.
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