AI entered mainstream consciousness in November 2022 when ChatGPT burst onto the scene and scooped up more than a million active users in one month. No longer just for tech giants and scientists, AI was suddenly pitched as a transformative force that anyone could use. The proliferation of advanced AI models like DeepSeek that lowered costs and made AI integration easier has only further heightened expectations of what AI might be able to do for companies.

Amid the growing enthusiasm, many see AI as an integral part of their future. One estimate suggests corporate investments in AI will triple by 2028.

But an unquestioning belief in the power of AI to radically transform business is risky. It may cause leaders to make suboptimal decisions that undermine their company’s potential for profitable growth.

When Companies Fall into the AI-Technology Trap

Take Snapchat. Founded in 2011, it quickly became popular—especially with Gen Z—due to features like disappearing messages and casual visual sharing. At its peak, Snapchat was one of the most downloaded apps in the world, with hundreds of millions of daily active users.

In 2023, Snapchat introduced My AI, a generative AI chatbot powered by OpenAI. Jumping on the AI bandwagon, the company seemed to assume that adding this novel feature would naturally enhance the user experience and boost engagement.

Instead, the move triggered widespread backlash.

My AI was pinned by default to the top of users’ chat feeds and couldn’t easily be removed. Users didn’t see it as an impressive, novel feature. Instead, they perceived it as intrusive and creepy, like an unwanted observer. The backlash was swift: App store reviews were flooded with one-star ratings citing the unwanted chatbot, and Snapchat’s ranking and reputation suffered. The app’s U.S. iOS rating nosedived to 1.67 stars. Google searches for “delete Snapchat” spiked by 488% in the months following the rollout, reflecting the widespread user discomfort and unhappiness with the service.

Snapchat is not alone. Nordstrom too learned the hard way that AI is no magic bullet when it acquired Trunk Club, a personalized styling service for busy professionals, and decided to embed AI into its operations to help scale the business. In doing so, however, it diluted the company’s core appeal—a high-touch, high-end personalized experience—triggering high return rates and sluggish sales. Unable to cover operational costs, Nordstrom finally decided to pull the plug.

Don’t Put the AI Cart Before the Strategy Horse

As the experiences of Snapchat and Nordstrom reveal, just adding AI to your products doesn’t guarantee success; whether or not it creates value rests on what companies do with it. When companies lead with AI or treat it as the answer, they put the cart before the horse and risk compromising their company’s strategy and the value it provides to the marketplace.

But when companies take the opposite approach, starting with strategy, identifying how they can offer buyers a leap in value, and then looking to technology as a tool to deliver that leap, AI can be a powerful catalyst to profit, growth, and commercial opportunities.

Consider Yunji Technology’s AI-powered delivery robots. Instant delivery around the clock is the norm in China. From hot meals to fresh flowers to daily essentials, almost anything is just a click away—and typically arrives within 15 to 30 minutes.

But a challenge arose for hotel guests who wanted to use delivery services to order late-night snacks, an extra toothbrush, or a forgotten phone charger.

Hotel security protocols restricted delivery workers from accessing guest floors, leaving guests no choice but to get dressed and head down to the lobby every time an order arrives—a cumbersome and frustrating process, especially for guests accustomed to placing multiple orders over the course of a single night’s stay. In the rare cases when delivery workers were allowed to deliver directly to the room, delivery personnel lost time, the hotel faced a security risk, and guests had to open the door late at night to a stranger.

Seeing the clear, “last-inch” logisitics problem, Yunji Technology developed a strategy to create cost-effective, personable delivery robots that would bring items directly to hotel rooms and then leveraged AI to actualize it. These cute robots are able to navigate autonomously to the guest’s door, gently announcing their arrival in a soft, childlike voice that’s sure to bring a smile. Once the guest retrieves the delivery, the robot cheerfully wheels itself away, even cracking playful jokes to other passengers in the elevator.

The robots quickly became popular, making hotel guests’ lives easier and more fun, helping delivery workers save time, and improving operational efficiency for hotels while enhancing their appeal to guests. In fact, hotels that use Yunji’s robots see a 27% increase in daily online travel agency comments. The number of positive reviews related to Yunji’s robots has exceeded 6 million, with 35% of reviews featuring user-uploaded images—far exceeding the usual rate.

Today Yunji robots capture 90% of the market in hotel robotics in China and are being used in more than 20 countries and 30,000 hotels. The company created a strategy that addressed a real problem, offered a leap in value for all parties, and then turned to AI to realize their solution. To thrive, like Yunji, companies need to get the strategy-value-AI sequence right.

Another successful example is Duolingo. The founders saw that in-person language classes are expensive and subject to geographical and scheduling constraints. Online platforms offered greater flexibility, but their one-size-fits-all approach couldn’t adapt to individual needs, and the lack of real-time interactivity meant that many learners dropped off as the programs couldn’t hold their attention and didn’t meet their individual needs.

So the founders set out to eliminate these pain points to create a breakthrough in value. Their strategy was to create a language learning experience that would not only make geographic and scheduling constraints irrelevant but it would also be fun, interactive, and tailored to each person’s needs. Seeing the answer in an online platform with tailored gamification, the founders leveraged AI to actualize their strategy. AI was the ideal tool to analyze and gamify user interactions, creating leaderboards to add engagement while tailoring language lessons and feedback dynamically to each user’s needs.

Duolingo could thus deliver the benefits of tailored education at scale, serving millions of learners simultaneously while making language learning fun and engaging. The result: Duolingo’s strategy to offer unique value to the marketplace attracted a massive global user base and profitable growth. By the end of 2024, Duolingo had more than 116.7 million monthly active users, 960 million total downloads, and 575 million registered users, making it by far the largest language-learning platform in terms of user base and reach. As for revenue, it pulled in $748 million in 2024—up 40.8% from the previous year—with a net income of $86.9 million. While Duolingo faced backlash earlier 2025 when the CEO stated the company would be “AI-first,” triggering angst that AI would be embraced over human workers, its revenue in the year continues to climb and is up 40%.