Supplier Momentum Is Not Customer Demand

The AI market currently presents product leaders with a strange combination of signals. Large investments, acquisitions, new agents and cheaper models suggest rapid expansion. At the same time, there are signs that customer spending is becoming more selective, while product teams are discussing churn, easy imitation and the growing need for judgment.

I think many companies are reading this situation incorrectly. They see activity on the supply side and interpret it as demand.

A competitor launching an AI assistant does not prove that customers want another assistant. A major funding round does not prove that buyers have found recurring budget. A cheaper model does not prove that the economics of the complete product work. An acquisition does not prove that users will change their behaviour.

These developments matter, but they answer questions about availability, confidence and competitive intent. They do not answer the customer question.

I have seen the same mistake outside AI. A market becomes busy, sales hears a new phrase in several calls, and leadership concludes that a roadmap response is required. The team then starts with the category rather than the problem: we need an agent, a marketplace, a mobile app or a new analytics module. Discovery becomes an exercise in confirming the requested form.

That reverses the burden of proof. Supplier activity should make me investigate, not commit.

When evaluating a new product bet, I separate three kinds of evidence. Category evidence shows that technology, capital and competitors are moving. Problem evidence shows that a specific group of customers struggles with something important. Commitment evidence shows that those customers will give up money, time, data, access or an existing way of working to solve it.

Only the last two can justify substantial product investment. Category evidence can justify a small investigation because it may change what is technically or economically possible. It should not be allowed to carry a business case by itself.

Consider a team exploring an AI agent for customer support. Competitor launches show that the capability is becoming common. Model improvements may reduce the cost of a prototype. Neither tells the team whether customers will connect their knowledge base, permit the agent to act, redesign escalation processes or pay enough to cover the service and operational risk.

Interviews about enthusiasm will not settle that question either. Customers can sincerely like an idea without being prepared to implement it. Better evidence appears when they provide real cases, involve security and operations, accept a limited live trial, return repeatedly without prompting or choose the product over an existing process. For an internal product, the equivalent is voluntary recurring use and an observable change in how work gets done.

This distinction also changes how I discuss competitors. A competitor feature is not automatically a gap. Sometimes it is evidence of a customer expectation we must meet. Sometimes it is an expensive demonstration that the market does not care. The only responsible answer is to examine whether it changes purchase decisions, retention or actual use among the customers we intend to serve.

Product leaders need to make this visible in planning. I would not present “the market is moving” as a reason to scale a bet. I would state exactly what that movement has taught us, what remains unproven and which customer action would count as stronger evidence. I would also agree upfront what evidence would cause us to stop.

This is especially important when building becomes faster. Low implementation cost makes it tempting to skip the demand question because trying something seems harmless. But every launched capability creates support, positioning, training and maintenance work. A cheap build can still produce an expensive distraction.

The current market is not short of products, capital or announcements. It may be short of customers willing to make another product part of their operating reality. My roadmap should be based on that distinction.