Alex Hormozi: AI Coding Won’t Make You Rich

In this video I’m going to make a case against AI — and more specifically why more people are not making money despite using AI a lot, and token maxing, and vibe coding, and making all these apps and all that stuff.

And so the big misconception I think around AI is that AI somehow canceled every other form of leverage. And if you’re new to the channel, leverage just means the difference in what you put in and what you get out. If you have a lot of leverage, put a little bit in, you get a lot out. If you have low leverage, then you put a lot and you get a little bit out.

So, you know, AI introduces high leverage, which is great — but the thing is is that there’s a lot of things that create leverage. And so this whole misconception around like, “Oh, we must only use AI in order to succeed”… taken differently: businesses right now who are using AI, and individuals who are using AI, and they’re seeing their token bills go up, are somehow not making more money.

And so what I find kind of interesting is a couple things. So number one: when I look at our business, we now have had another kind of step increase in our revenue — but it’s not because of AI. That’s the thing. It’s not because of AI. If it didn’t exist, we still would have had the increase. And so it’s not like a direct line there.

The second kind of proof point that I think is more interesting around this — and I’ll give you some tactics — is that I talked to a number of my wealthiest oldest friends over the last week or two. And I said, listen, I know you need to have public appearances. Of course — you know, I’m a super advocate because you have to do that — but I said, how much are you actually using AI every day? And like they kind of like look around and they’re like… and I was like, well, your teams are? And he’s like, oh yeah, of course, you know, of course. They’re like, of course our teams are using it, and I’m bringing people in and we’re training the team up and all that kind of stuff. And I was like, but you’re not using it? And they’re like, no no, I’m not. And I was like, so… that’s very interesting to me.

And so this is the thought that I kind of want to challenge you with — and I’ll leave some tactics at the end — which is: there are a lot of forms of leverage, and many forms of leverage are multiplicative.

So for example, capital still has tremendous leverage. AI coming in didn’t somehow erase the leverage that capital uses. If you are in media and you make a video like this and thousands of people see it or millions of people see it — that is tremendous leverage, right? AI doesn’t erase that.

And when you multiply some of these together — let’s say you have capital and you have media and maybe you have teams, right? People still create leverage for other people. I do find it ironic that like these frontier labs that have all this AI still have thousands of employees. And so just kind of interesting as a counterpoint of like what people are still being needed and useful.

But the thought of it is this: I’m seeing so many business owners trying to AI-max, and because their capacity to work has increased using AI, they are now doing things they otherwise would not have done if they didn’t have AI. But the thing is, those things that they otherwise wouldn’t have done were lower priorities. And so now they’re doing things that were less important, faster and automated. Great. Not great — doesn’t matter. That’s my point.

And so one of the interesting things about not having AI is that it forces you to prioritize better. It forces you to focus on the things that are going to move the needle in the business. And I’m not seeing — with an exclusion of just a handful of exceptions — most AI use cases that I’ve seen are not actually making the business a ton more money.

I think that having, you know, way more ad creative — I think for sure is helpful from an advertising perspective. We have an AI sales rep, which has been helpful. But the thing is, it’s like the AI sales rep is great — but like I also know how to build a sales team. So it’s not like this, you know… I’m saying like it’s more efficient, you know, and it scales, but it’s typically not the limiter of the business.

And this is my point: the constraint of the business — many business constraints, at least at this point — are still not as perfectly solvable with AI. And if they were, then everybody would be making a ton more money. This is kind of like the crux of this.

Which is: let me give you some other examples of leverage that people are just not employing — that you don’t need any tech expertise to do. If you have a one-on-one business, you can go to one-to-many. It’s like that would create a lot of leverage. Even one to small group: if you go one-on-one to one-on-ten, you have 10× leverage — like just like that, with that one decision, right?

If you go from having scheduled appointments with clients to asynchronous appointments with clients — it’s like that gives you a tremendous increase in leverage in terms of how many people you need from a deliverable perspective.

If you change your sales motion so that a high percentage of people buy — and so instead of needing ten sales people you need two, and they close the same amount because you’ve basically educated your prospects throughout the sales process more fully so they need less information to make a decision — which means you have fewer conversations and shorter conversations for your sales reps; they talk to more qualified customers — then as a result you can take what used to take ten people and you can funnel it to two. None of that uses AI.

This is my point: there’s so many places in a business where you can increase leverage that there’s this fallacy that because I now have this infinite tool — and I’ll use “infinite” with quotes here — I’m just seeing a lot of people using it, not making more money. That’s kind of my point.

And so it’s this idea that we can throw away the fundamentals of business — but that’s not true. Like, you have to. One is: you want to use every form of leverage that you have at your disposal to solve the constraint of the business. If you don’t know what the constraint of the business is, you just doing more shit automated does not make you more money.

And I think this was the conversation that I was having — because I’ll tell you the highest leverage thing that you can do, even higher leverage than AI. Ready for it? Making good decisions.

Think about it. If I have my whole team and I say, hey guys, we’re actually not gonna do this whole bunch of work over here because I don’t think it’s important anymore — by doing that I get so much more out of my team. Like, it is more efficient for me to determine that something is not a priority than for me to automate something that is not a priority. That was good. That’s pretty good. That is higher leverage.

And so I will get more out of this resource that I have — my team — than if I just try and automate it and then create an output that isn’t relevant. And so this is what I’m saying.

And so I think quality still matters. AI is not there for a lot of things. There’s obviously use cases, and we’re, you know, I would say very early and very aggressive adopters of AI across the business. When I look at the business overall, the things that are growing it are the things that have always grown it, right? We need to generate more demand, we need to convert a percentage of that demand, and we need to deliver very high quality stuff. And right now AI can help — but it’s like having access to a lot of… it’s actually probably a really good analogy: a lot of it’s almost like access to a lot of virtual assistants, like third-world virtual assistants. That’s what in some ways right now a lot of the use cases are like.

I’m not saying it’s a perfect analogy, but like there’s a lot of through-lines there — which is: that’s always been there. And to be fair, I think virtual assistants right now sometimes are even cheaper than the AI token usage. But that’s always been there, and businesses have still competed that didn’t have them or did have them, and it’s still the same marketplace, and there’s still high quality, and there’s still people who have good brands, and there’s still great offers and bad offers. Like if you have a terrible offer, then AI on the back is not going to help. You know, you can say, well maybe AI’d improve my offer — maybe, maybe not. I don’t know.

And so anyways, that is my public service announcement — which is that AI, though it increases leverage, does not cancel other forms of leverage. And for most people, they’re using it on things to be more distracted, because they have more resources now. They are still making poor decisions about how to allocate those resources, and as a result they are not making more money just because they have AI.

And so I would ask yourself this question, which is: has implementing AI in my business made me more money? If it hasn’t, then you are likely using it in the wrong place — which means that you need to return to the thing that matters most, which is identifying your true constraint, and then forcing all of your very limited — and I say that for myself included; all businesses, compared to the resources available in the world, every one of us has like a speck of resources available to us — and so we have that tiny speck, and our ability to focus that tiny speck of resource on the one thing that’s going to move the needle… our skill at being able to do that is the thing that will ultimately make you more money, even more than AI. AI is just a tool. It’s not the answer.

So anyways, that is my two cents for the day. I hope you feel like my very impromptu style. If you hate it, you can let me know too. Anyways, lots of luck. If you like this video and you’re a business owner who wants to break through your current revenue ceiling: I distilled every lesson from scaling 10 businesses past 10 million and three businesses past 100 million into a completely free scaling roadmap that I’ve used to go from 0 to 1, 0 to 10, and 0 to 100-plus. And so you can click here and you can check it out — again, absolutely free. And since you’re a business owner, I appreciate you, and enjoy.