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Marketing School

The decline of AI

21 min episode · 2 min read

Episode

21 min

Read time

2 min

Topics

Productivity, Marketing, Sales & Revenue

AI-Generated Summary

Key Takeaways

  • Growth Rate Reality: Cursor reached $500M ARR and Lovable hit $200M ARR in roughly 12 months, extraordinarily fast compared to traditional SaaS companies. Even with declining growth percentages, these speeds remain exceptional and create unrealistic expectations for normal businesses.
  • Data Verification Protocol: Leaders must implement a verification step before accepting AI-generated outputs by asking team members if they double-checked data accuracy. Unchecked AI hallucinations in presentations waste time and erode trust, requiring immediate correction through this simple accountability question.
  • Enterprise AI Shift: Anthropic gained 0.8% market share while OpenAI declined 1% based on Ramp credit card spending data. Enterprise customers prioritize reliability over experimentation, with Claude's lower hallucination rate driving adoption for data-heavy work and coding tasks requiring accuracy.
  • Marketing Efficiency Focus: Companies now direct teams to stop testing every new AI tool and instead apply AI only to proven revenue-driving fundamentals. The shift from "do more with AI" to "use AI where it scales what works" addresses AI slop problems and refocuses on KPIs tied to profitability.

What It Covers

Recent data suggests AI coding tools face declining growth rates, but the narrative misses key context: inaccurate metrics, user tool-switching behavior, and Anthropic's enterprise dominance reveal continued strong AI adoption despite surface-level concerns.

Key Questions Answered

  • Growth Rate Reality: Cursor reached $500M ARR and Lovable hit $200M ARR in roughly 12 months, extraordinarily fast compared to traditional SaaS companies. Even with declining growth percentages, these speeds remain exceptional and create unrealistic expectations for normal businesses.
  • Data Verification Protocol: Leaders must implement a verification step before accepting AI-generated outputs by asking team members if they double-checked data accuracy. Unchecked AI hallucinations in presentations waste time and erode trust, requiring immediate correction through this simple accountability question.
  • Enterprise AI Shift: Anthropic gained 0.8% market share while OpenAI declined 1% based on Ramp credit card spending data. Enterprise customers prioritize reliability over experimentation, with Claude's lower hallucination rate driving adoption for data-heavy work and coding tasks requiring accuracy.
  • Marketing Efficiency Focus: Companies now direct teams to stop testing every new AI tool and instead apply AI only to proven revenue-driving fundamentals. The shift from "do more with AI" to "use AI where it scales what works" addresses AI slop problems and refocuses on KPIs tied to profitability.

Notable Moment

One host used Granola AI note-taker during an eight-hour leadership meeting to identify each team member's specific weakness for 2026, then posted the computer-generated assessment in Slack where nobody could argue with the objective analysis.

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Episode Transcript

Here's something most small business owners don't wanna think about. What happens when something goes wrong? A customer slips, a shipment gets lost, a tool breaks, or someone gets hurt. You can lose thousands overnight, and most people only realize they need insurance after it's too late. That's why I like what Next Insurance is doing. They make getting business insurance as easy as ordering lunch online. You answer a few quick questions, and Next figures out what you need. And just like that, you're covered. No phone calls. No headaches. Just fast affordable coverage that actually protects you when things go sideways. Don't wait for a problem to remind you you're uncovered. Policies start as low as $29 a month. Get protected in minutes at nextinsurance.com/ms. That's nextinsurance.com/ms. I have a good topic for us to start with today. Are you ready? Yes. So this is the decline of AI to death of AI. So I'll slow down a little bit. So the decline of AI to death of AI. Cursor, which is at 500,000,000 ARR right now, went from 62% growth to negative 18% growth in eight in six months. Okay? That's one. Number two, Lovable, 200,000,000 ARR. They just hit two 100,000,000. Right? They were, like, celebrating it on LinkedIn. Lovable, these are vibe coding apps. Okay? So, cursor's more of an ID, but Lovable went from 207% growth to negative 50%. Okay? Now senior engineers are look. There's a chart over here, which I'm gonna show you in a second, but Windsurf, down from 104% growth. Remember, they sold to, they sold to Google, I think, eventually. They're trying to sell the open air. I remember that $4,000,000,000 or something, negative 30%. Total category, 76% growth down to negative 15%. So senior engineers are like, see, this this whole this whole stuff is a bubble. It doesn't work, blah blah blah, but the bubble isn't actually popping because when you look a little closer, base forty four that was acquired by Wix, remember that one? There's a lot of these acquisitions, right? But they went from 950% growth to eleven sixty one percent growth in the same period, and then Claude Code exploded to 1,000,000,000 in revenue, and it's not even on this chart, right? So this chart this chart over here, you can see, I can't pull it up that closely, but all we need to see is that it's turning red. Like, Lovable is turning red, the growth rates. Right? You can see cursor's turning red. Their data's off. So you look at all this over here, and then people are just like, oh my god. It's dying. It's dying. But the reality is no, like, I would say a lot of these people using these apps are pretty promiscuous. I'm pretty promiscuous. Like, I'll jump over to Replit. I'll jump over to Lovable. I'll switch to whatever. I'll tell you about the latest tool. You'll tell me about the latest tool. So I …

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Books, tools, and gear mentioned in this episode

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Tools

  • Cursor reached $500M ARR and Lovable hit $200M ARR in roughly 12 months, extraordinarily fast compared to traditional SaaS companies.
  • Cursor reached $500M ARR and Lovable hit $200M ARR in roughly 12 months, extraordinarily fast compared to traditional SaaS companies.
  • by Anthropic

    Enterprise customers prioritize reliability over experimentation, with Claude's lower hallucination rate driving adoption for data-heavy work and coding tasks requiring accuracy.
  • One host used Granola AI note-taker during an eight-hour leadership meeting to identify each team member's specific weakness for 2026, then posted the computer-generated assessment in Slack.

company

  • SPONSORS: [{'name': 'Next Insurance', 'url': 'https://nextinsurance.com/ms'}]

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