AI fog forces leaders to rethink long-term investment bets
MASSACHUSETTS, UNITED STATES — A new analysis is putting language to a feeling that has settled over American boardrooms: the future has become harder to see, and long-term bets are getting harder to justify.
In an analysis published in Harvard Business Review, the article describes the current moment as one of “extreme opacity” — what it calls the AI fog — where the pace of artificial intelligence (AI) has eroded confidence in everything from medical school enrollment to 10-year capital expenditure plans.
Toby Stuart, who wrote the analysis, is the Helzel Chair in Entrepreneurship, Strategy and Innovation; the Faculty Director of the Lester Center for Entrepreneurship; and the Chairman of the Department of Management and Organizations at the Haas School of Business, UC Berkeley.
MBA applications have sharply declined, jobs for college graduates have grown harder to find, and CEOs at companies like Block have already cited AI as the reason behind massive workforce cuts.
For United States business leaders, the message is direct: the old playbook for placing long-duration bets no longer fits the environment they are operating in.
Why the AI fog is breaking long-term planning
Confidence in a specific vision of the future has always been the foundation for long-term investment, but AI has made that vision opaque in ways most institutions have not adjusted to.
Equity values depend on terminal value, which assumes business durability — and AI is undermining that assumption by threatening competitive moats built on software, process, human capital and content.
Internal capital allocation is breaking down for the same reason, with stage-gate processes still using five- and 10-year forecasts that no longer hold.
The analysis frames the shift directly: “When you’re confident about your ability to see 30 years ahead, you build a skyscraper and a railway. When you can see months ahead, you pitch a tent and buy a bicycle.”
That sentence reframes the conversation for U.S. executives. Companies still running 10-year DCFs while their competitors build for optionality are quietly betting on a world that no longer exists.
Why optionality is the only strategy that fits the fog
The new playbook is built around staged investment, modular teams and constant sensing of frontier AI capabilities.
Leaders are being told to replace “What is the 10-year return on this investment?” with smaller, information-buying commitments that preserve the right to follow on later. Organizations are being redesigned around adaptable structures rather than locked into single forecasts.
The analysis puts the takeaway plainly: “In the face of the AI fog, the sudden invisibility of the future means that the only compelling option is optionality itself.”
For U.S. outsourcing firms, that line points to a real opening. Companies that need flexible workforce capacity, scalable back-office support and modular operational teams without committing to long-term hires will increasingly turn to outsourcing partners.
Providers offering staged, AI-integrated services and adaptable delivery models will capture the contracts shaping the next decade. The future of work belongs to companies that can move fast in the fog — and to the partners helping them stay nimble.
