From AI Bubbles to Health Dividends: Rethinking Growth Engines
Healthy individuals and populations are not just a social good—they are the most reliable growth engines of the 21st-century economy.
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⏱️ Better prepped for next week in 30 secs:
- 🤖 95% of GenAI projects fail ROI — MIT finds adoption is high, but meaningful business transformation is rare.
- 📉 Barriers to value — CIOs cite scaling failures, misplaced spending, and soft attrition; complex internal logic and opaque processes stall GenAI adoption.
- 🫧 AI bubble fears — Analysts warn the U.S. economy leans too heavily on promised productivity gains that remain elusive.
- 🚀 Silicon Valley hype — Claims of a “digital god” and “bigger than the Industrial Revolution” contrast with weak returns and inflated valuations.
- ⚠️ Survival doubts — Economist warns it would be a miracle if all “Magnificent Seven” firms still exist in a decade.
- 💸 Disappointing revenues — UBS notes GenAI revenues are <2% of the $2.9T capex going into datacenters through 2028.
- 📊 Macro revisions — U.S. job growth overstated by 911k (Mar ’24–Mar ’25); confidence in finding work falls to record low since 2013.
- 🏥 Missed investment upside — Treating healthcare as cost-sharing blinds investors; healthier populations are the strongest growth engine of the 21st-century economy.
- 🌲 Roadless Rule — The U.S. Forest Service is seeking comments on a proposal to rescind the 2001 protections that ban roadbuilding and logging in sensitive wilderness areas; go here to add your comments by Sept 29.
💯Want to be extra prepped? Change Leadership skills are your secret edge.
[emerging tech]
95% of Gen AI initiatives generate zero ROI per a new study by MIT
"Adoption is high, but transformation is rare" according to the MIT State of AI in Business 2025.
CIO's cite several patterns contributing to lack of ROI: Failure to scale, misplaced spend and soft attrition vs measurable cuts. The MIT report itself also noted that Gen AI projects struggle when they to tackle highly complex business rules and processes:
"Struggling categories were often those involving complex internal logic, opaque decision support, or optimization based on proprietary heuristics. These tools frequently hit adoption friction due to deep enterprise specificity."
🫧 More talk of an AI Bubble
"The entire U.S. economy is being propped up by the promise of productivity gains that seem very far from materializing" says The Atlantic.
The Economist also notes a euphoric hubris coming from the usual suspects in Silicon Valley with references a transformation that will be "bigger than the Industrial Revolution", will create a "digital god" and be worth "hundreds of trillions." Of course many of these players have by now already had their payday, so the exuberance makes sense.
But the companies and investors still waiting for their ROI do not share the exuberance. UBS bank says revenue generation so far has been disappointing.
This is an understatement: Revenues are currently less than 2% of the 2.9T being poured into data centers between now and 2028...this is just the cost of building the datacenters - not operating and providing them with electricity.
The bigger risk says Fade_Dance (Hacker News thread) that would overshadow any AI downturn is the stock concentration bubble: the "index concentration and the reflexive feedback loop which drives more and more passive dollars to the biggest companies."
[macro-economics]
As we noted in June 2024, job figures have been inflated
Job growth for the period of March 2024 to March 2025 was revised downward by 911,000 this week, yes during the week of 9/11. This means that job creation figures were overstated significantly for much of 2024.
S3T readers were not surprised by the size of this downward revision: The June 14 2024 Edition of S3T explained the problem with the way the government measures jobs and quoted Economist Anna Wong who said at the time that job growth was being overstated by about a million jobs a year.
If you follow the link to the June 2024 edition you'll see links to a deeper dive that explains why it is difficult for the federal agencies to measure jobs objectively. There's a technical challenge that's important to understand. This is not a political conspiracy or effort to deliberately misstate job figures. It's just that its hard to do it correctly with outdated methods and technologies.
Job search confidence lowest ever: New York Federal Reserve's Survey of Consumer Expectations for August indicated a 44.9% probability of finding another job - the lowest since the survey began in 2013.
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[perspective]
Healthy individuals and populations are the most reliable growth engines of the 21st century economy
Imagine being an investor and suddenly realizing you're missing out on some of the best opportunities.
One could argue this is happening right now: investors are missing out on an entire category of upside. Opportunities for financial returns, risk management and market leadership are being lost because we frame healthcare as a cost-sharing zero sum game where more powerful players deflect costs onto less powerful players while using philanthropy to maintain reputation.
This comes from a flawed understanding of what healthcare is:
Conventional thinking in US healthcare assumes that healthcare finance is simply a set of costs to be shared between the patient, the insurer, and the government.
Yet each of these players are really - whether they realize it or not - investors who have clear incentives to invest in good health outcomes:
- Patients have clear gains to be made by investing in their own health
- Insurers have clear gains to be made by investing in the health of their insured members (healthy members incur smaller medical costs, dead members don’t pay premiums etc)
- Governments also have clear gains to be made by investing in the health of their citizens: healthy citizens spend more, create more jobs, invest more and generate more taxable economic activity than sick or dead citizens.
If we agree that healthcare finance then is primarily an investment activity - not simply a cost sharing exercise - this takes us to a set of logical next recognitions:
- Patients, insurers and governments are typically not highly competent savvy investors...
- SO Partnership with professional and institutional investors would be helpful: after these players highly skilled at investing and know how to make use of all of the most powerful financial instruments.
The next question is:
What is the best way to make institutional investors motivated to become partners in the model of investing in health outcomes?
To illustrate the shift needed:
- Private equity firms aspire to invest in “sick” companies, believing that over time they are able to bring them to a healthier state.
- VC investors invest in young struggling startups and over time help them strengthen and grow
- Governments - leveraging their bailout prerogative - exercise what is essentially an investment action to intervene in an industry or large corporation that is facing an existential risk.
Each of these players intuitively understands a model of investing in the future health of companies or industries as economic agents who need to be healthy in order to maximize their economic potential.
Is it such a stretch for them to round out their investing activities to include investing in individuals and populations who are likewise economic agents who need to be healthy in order to maximize their economic potential?
Wouldn't it be logical for them to expand their exposure and upside by leveraging a model of investing in the future health of individuals or populations as economic agents who when healthy can maximize their economic potential with positive spillover effects for investors.
One vital step for making this work likely requires a change in tax policy:
Essentially a change in which the federal government says, “if you can increase the health and longevity (and by extension the taxable economic activity) of the tax base in the long term, then I will allow you pay a lower rate of capital gains taxes in the near term”.
The government would then be essentially trading current tax revenue for future (larger) tax revenue.
This is not a call for charity or corporate social responsibility—it is a recognition of missed investment upside. Framing healthcare as a zero-sum cost-sharing exercise blinds us to the fact that patients, insurers, and governments are already investors in health, albeit poorly equipped ones, doomed to dismal returns in a dysfunctional hodgepodge of legacy systems.
The opportunity here is not to offload costs while polishing reputations through philanthropy, but to unlock new channels of returns, risk mitigation, and long-term market leadership by treating health as the investable asset it truly is. Those who fail to act will forfeit both impact and profit. The gains will go to those who recognize that healthier individuals and populations are not just a social good—they are the most reliable growth engines of the 21st-century economy.
Founders and financiers: this is your shot.
[nature notes]
🌲Your Input Needed: Roadless Rule
The National Forest Service is seeking comments on a proposal to rescind the 2001 Roadless Area Conservation Rule which prohibits road construction, repair and logging in certain wilderness areas.
To read the proposal and add your comments please go here no later than Sept 29:
https://www.federalregister.gov/documents/2025/08/29/2025-16581/special-areas-roadless-area-conservation-national-forest-system-lands#open-comment
The given justification for rescinding the roadless rule suggests there are local specifics the federal government is not suited to manage, and thus should turn this back over to the state and local governments.
My take: It's good for the federal government to give thoughtful consideration of what matters are best regulated by federal vs state or local governments.
But two key considerations guide this matter:
- The impact of roads in sensitive wilderness areas
- Road making policies - especially in wilderness areas - should focus on protecting the nature's services (not just harvesting the consumables nature provides) and should not be allowed to contribute to depletion or degradation of those vital services (clean water, soil and pollinator sustainment, biodiversity, carbon storage, and recreation).
- Roads often increase wildfire risks by introducing more human access points and ignition sources. Roads can also accelerate erosion, fragment sensitive habitats, increase roadkill, degrade watersheds, and bring higher levels of trash and pollution into previously intact ecosystems.
- The partnership of federal and local governments
- Local governments and communities often face overwhelming pressure from outside corporations seeking short-term logging, mining, and building permits - which may not be in the best interests of the community.
- The poor health, environmental damage, and persistent economic gloom of the Appalachian region remind us about the unfettered exploitation of natural resources and local communities that can occur when there is lack of accountability.
- The strongest accountability comes from federal + local government partnerships. Federal government can provide a helpful backstop to local governance, thru federal laws that take certain issues off the table and protect local communities from fighting unwinnable battles against large corporate interests. In this model, federal rules provide a supporting framework for nurturing irreplaceable natural resources, while local stakeholders guide management.
- Simply removing federal laws and protections in the belief that local communities can stand alone against corporate exploitation doesn't fulfill the spirit of right-sized government and local self-determination. It does however make it easier for certain players to trade the well-being of local communities for campaign donations from mining and logging companies.
I don't think any individual would intentionally do this. But collective actions have achieved these kinds of outcomes. I think we have to be careful.
🌏Antipodes
If you dig a hole straight through the earth where would you come out? Wonder no more: Go to antipodesmap.com and enter your address.
The point exactly opposite your location on earth is called the antipode. Oh and that theoretical hole you’re digging? it will most likely come out under water: Only about 4% of the earths surface has land on the opposite side. For 96% of land, an ocean is the antipode.
[panoramas]
[playbooks]
- Spend Wisely in a Hype-Driven World
- Gaining Buy-in for Data Modernization
- Flipping the Script: Understanding and Changing Internal & Macro Narratives
- Shift to effective gatekeeping in the age of generative AI
- How to Stop Zombie Projects from Sapping your Focus and Resources
- Harmonize Different Kinds of Expertise to Achieve Success
- Addressing issues related to uneven accountability
- Validating AI use cases
- 6 Proven Ways to Resolve Conflicts
See Full List of S3T Playbooks
Opinions expressed are those of the individuals and do not reflect the official positions of companies or organizations those individuals may be affiliated with. Not financial, investment or legal advice, and no offers for securities or investment opportunities are intended. Mentions should not be construed as endorsements. Authors or guests may hold assets discussed or may have interests in companies mentioned.
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