Beyond the hype: The real strengths of AI
Back
Article Type
Market Updates
Topic
Macro
Published
October 01, 2025
Read time
4 mins
Author
Jane Hepburne Scott
Share

Is AI the latest overhyped tech craze, or are we witnessing the dawn of a truly transformational era? Sceptics see echoes of past bubbles, but for believers, AI represents a revolution on the scale of the internet. One poised to reshape how we live and work. Using real-world examples, we examine AI’s strengths and weaknesses, the areas where it’s already delivering value and what might lie ahead.

 

Where AI shines and where it struggles

 

AI is brilliant at reducing digital drudgery. It is at its most effective when it’s used to recognise patterns in large datasets and perform repetitive, high-volume tasks with speed and consistency. It works best when the task has a clear goal and can improve over time with feedback. 

 

In contrast, AI struggles with common sense reasoning, understanding context, nuanced judgement, or where data is limited. It can confidently produce false outputs (known as hallucinations), reflect biases in training data, and lacks transparency in decision-making. All this underscores the need for human oversight and thoughtful integration, particularly in high-stakes environments. 

 

Real-world cases where AI is making an impact

 

One of the most compelling arguments in favour of AI’s transformative impact is its broad-based adoption and its usefulness to ordinary people. ChatGPT, the biggest brand in AI, recently reported 800 million weekly active users. Unlike past overhyped technologies, like the metaverse, which never really took off and struggled to find mainstream uses, this feels different. Something real is happening in this space. Let’s look at some examples. 

 

Personalised recommendations – Netflix and Meta

 

At Netflix, gone are the days of manual browsing and static genre lists. Today, 80% of viewing is driven by AI recommendations. Every one of Netflix’s 300 million paid members has a home screen uniquely curated for them. Future enhancements include voice-powered searching for nuanced queries, for example, ‘play me a witty feel-good movie’, TikTok-style preview feeds and AI dubbing that preserves original actors’ voices in any language. Imagine Arnold Schwarzenegger delivering “I’ll be back” in flawless Japanese. This personalisation deepens engagement, supports pricing power, grows subscriber numbers and funds further content, reinforcing Netflix’s competitive edge. 


Meta’s journey reflects a similar evolution. From static user profiles, its algorithms have advanced to using AI to curate content from creators worldwide, while also automating both ad targeting and content generation. Looking ahead, we should expect to see AI-generated videos created for individual users based on their interests, and even more targeted advertising. This personalisation not only boosts user time-on-platform, but also enhances the effectiveness of Meta’s adverts, its principal revenue stream. Longer term, Meta envisions producing augmented reality (AR) glasses that become the next computing interface, embedding AI that ‘sees what you see’ and provides real-time context, including object recognition, live language translation and more. 

 

Knowledge work and office productivity – Microsoft 


AI is rapidly transforming white-collar work, and Microsoft’s Copilot is at the forefront of this. Copilot acts like an always-available digital assistant. It can draft and summarise emails, reports and presentations, analyse data, provide meeting notes, and automate workflows by linking with systems like CRM and SharePoint. Not long ago, these tools were almost unusable. Today, their impact on work is significant. 

 

Microsoft is testing advanced features such as deeper reasoning and voice interaction, so over time, Copilot could evolve from a helper to a proactive digital collaborator capable of completing tasks independently. Think of the impact of a tool that sifts through your emails, fills in your expenses form and books a holiday for you. By speeding up routine tasks, employees could focus on higher-value, creative or strategic work. While this should increase output and efficiency, it also raises questions about its impact on the shape of the workforce.

 

Generative design – Autodesk

 

Traditionally, an architect would create designs based on experience, creativity and calculations. The process was limited by human imagination and time. Autodesk, known for its design software, has been a pioneer in generative design. Here, an AI algorithm explores thousands of design permutations based on goals and constraints set by the user. The AI rapidly tests and refines options, often uncovering solutions that humans may not have considered. Instead of a designer manually drawing everything from scratch, their job is to curate and guide the AI’s output and to focus on strategic decisions. This speeds up the process, improves outcomes and allows for better balancing of factors such as cost, strength and aesthetics. However, it may take some of the drama out of a typical episode of Grand Designs. 

 

An e-bike for the mind?

 

As Steve Jobs once said, a computer is “like a bicycle for the mind.” Perhaps then, AI is the e-bike, faster, more powerful, but still requiring human direction. Progress may not always be linear, but over the next decade, AI will likely become embedded, ubiquitous and profoundly transformational. 

 

For investors, AI is more than a technological breakthrough. It signals the potential for sustained growth and value creation across sectors. While disruptive change often meets scepticism, history shows that transformative technologies consistently improve and reshape industries. With its rapid adoption, broad application and structural impact, AI – and the companies enabling it, is a compelling long-term investment theme.

 

Disclaimers

Author

Jane Hepburne Scott
Investment Manager
Jane Hepburne Scott, investment manager, is co-manager of the Aegon Technology Strategy and support manager of the Aegon Global Equity Income Strategy. In addition, her primary analysis responsibilities cover the technology, communication services, consumer discretionary and staples sectors. Jane joined the company in 2021 and previously worked for Edinburgh Partners and Dundas Global Investors. She has 14 years industry experience and is a CFA C...
View profile
Related Articles
View all Aegon insights