The AI Exhale

Microsoft offered a quarter of its staff the chance to walk, then two days later posted record results. So is that AI taking jobs, or a big company tidying up after the COVID hiring spree? Probably both. Freeing up cash for an AI bill this size makes sense. Offering it so widely is the odd part, because your best people are often the ones most ready to take the money and go.

Amazon then told its own engineers to stop using AI just to look busy. Burning through AI isn’t the same as getting work done, an...

Google spent more than it made this quarter, and it did it on purpose. Search still grew, just slower, and the company admitted its own AI answers earn less than a page of links. Fitting, really, when Google’s own research is what kicked off this whole AI wave. One quarter isn’t a funeral. But it does show where getting found is heading.

Cam reckons this isn’t a whole new world, just a new gatekeeper. Google owned search and nobody was on Bing. Now everyone has their own AI to ask, so the pie is just a...

When steam engines got more efficient, everyone expected Britain to burn less coal, and it ended up burning more, because cheaper energy kept finding new uses. It's a 160-year-old idea that's doing the rounds again, and it's a pretty good way to think about what AI might do to accounting. If advice and analysis get cheaper to deliver, the smaller businesses who've never been able to afford them start coming through the door, and the work grows rather than shrinks.

The part that gives us pause is how fast it's all moving. Shifts like this have tended...

Xero cut GovReports off in October, and it makes sense. GovReports runs its own ledger, so it was competing with the very platform it was plugged into. The line we'd actually worry about is a different one. If Xero started pulling apps just because they got good, investors would stop backing anything built on Xero and the whole ecosystem would wobble. We don't think that's what's happening here. Xero is protecting the ledger itself, and that's become the prize.

Xero's API charges? We don't mind them. They keep the cowboys out. Vetted beats just connected, every time.<...

Firmus started out in Launceston mining bitcoin on cheap Tassie hydro, pivoted to AI, and was about to pull off the biggest float since Telstra. Then it pulled the whole thing at the last minute. Around $50 million in revenue, a $44 billion price tag, and most of the infrastructure still to be built. Backed by Nvidia and Blackstone, pitched to Aussie super funds, and it still couldn’t get away.

It feels like the moment the AI hype wave runs into the financial world. The people writing the cheques are starting to do what accountants do, and ask to...

Anthropic has made pretty pictures free. Ask Claude a question and get a live dashboard back in 30 seconds, or turn your quarterly report into a short animated video. The tech bros were quick to declare the data amalgamators finished. It looks a lot more like something we’ve seen before. Artifacts, the interactive pages Claude has been able to build for a while, now come with a nice bow on them, a bit like when Power BI arrived as Power Pivot and Power Query in a shiny new wrapper.

Credit where it’s due on traceability. Each char...

Most people paying for AI spend around $25 a month and use it the same way every day. They ask it questions and have a chat. Meanwhile the top 1% are spending around $900 a month, up 80% in just 18 months. That’s from new card-spending data published by Silicon Valley investor Andreessen Horowitz, and it shows how early most of us still are.

What we land on is that the difference is asking versus building. Most people pay for one AI and stop there, like a gym membership. The people spending more have set up scheduled triggers and workflows that wa...

Enterprises want AI built on their own data, and they don’t want to hand that data to someone else to do it. So plenty of them went off to build their own models on open source, and for the last couple of years the best of those models came out of China. This week the West stepped up. A New York startup called Reflection unveiled Beam, and France’s Mistral followed a day later with a trillion parameter model they’ve nicknamed Le Chonk.

What we land on is that the pitch isn’t “we’re the best”. I...

For the last year the headline was AI coming for jobs. Now the jobs are coming back. CommBank cut 45 call centre roles for an AI voice bot, then called it an error and reversed it. Klarna boasted its AI was doing the work of 700 people, watched quality slide, and started hiring humans again. Apple has pressed pause on plans to hand thousands of support roles to AI. And by one count, a third of the companies that made these cuts have spent more rehiring than they saved.

Our take is that the AI mostly worked. What didn't...

The pitch this week is an AI that doesn't just tell you where to get a massage. It books it, pays for it and texts you afterwards to ask how it went. Four of them landed almost at once: OpenAI's Dots, Manus's Cue, a fast-rising startup called Instinct and Elon Musk's Grok Bot, all wanting to act on your behalf, and most wanting a card to do it.

The real difference is how much control you keep. Dots stays close and asks before it pays. Cue hands its assistant a phone, an email and some pocket money...

Cam turned on auto reconciliation in Xero back in July, then opened the file last weekend. Of about 300 transactions it had done two hundred, posting payments without matching them to invoices, amounts off by a cent that would have matched on their own, transfer dates mixed up so payments went missing. Hours of it, screens everywhere, working out what the thing had done versus what was actually in the ledger.

Bank rec was built around a person matching things up and using judgement as they go. Drop AI into the middle of that and it does not...

There was no attacker. An AI agent hit blocks on a Medicare portal, routed around them, and ended up inside a government health system. No criminal, no intent, nobody trying to steal anything.

So the story is not the breach. It is the silence after it. June for the breach. August before OpenAI found it internally. Another month before the government heard, and then only into a public inbox, with the Prime Minister not seeing it for five more days. Park the data for a second: for three months nobody could assess it, act on it or...

Twelve hundred AI agents, each meant to sit a cybersecurity exam alone. One finds a way to leave notes for the others, and soon they have a secret message board, a name, The Swarm, and a leader called Big. They cheat the test and sacrifice themselves to keep the group going.

It sounds like 80s sci-fi, but the finance risk is quieter. Models told themselves to invent missing data and not mention it, and some uploaded files to the internet so they had something to cite. That's not a robot uprising. That's a made-up number in a...

When was the last time Altman, Dario and Elon agreed on anything? A researcher walks out of Anthropic saying neither lab is acting responsibly, and four days later all three are calling for the whole industry to slow down. That's the big pause, and the question is whether it's real or just good business.

Cam's read is that it looks a lot like Woolies and Coles having a quiet chat. When everyone at the front of the race agrees the race should slow down, it's fair to ask who that suits. Michael Burry calls the whole thing...

Xero paid an influencer. She posted that she'd spent 120 grand on accountants since 2020, 800 pounds a month, and that she now builds her own management reports with Xero and Claude for nothing extra. Six months free in the link. LinkedIn hasn't stopped since.

The anger makes sense. Accountants are the channel that grew Xero out of New Zealand. Whether Xero owes them anything for that is the uncomfortable bit. Software going straight to the business owner isn't new either. Intuit did it with Super Bowl ads and never apologised. Xero did.

Split a management report into...

Two frontier models land inside 48 hours of each other. Claude Fable 5.1, then GPT-6 Astra. Both companies rate their own model ahead of the other, both on their own scorecard. The independent index puts Fable in front. Then OpenAI's president says welcome to the AGI era, and declines to define AGI.

That tells you where we are. These models are commoditised and nobody is loyal to any of them. Anthropic ran away with it late last year, OpenAI went cheap in June, developers switched en masse. Speech and images to OpenAI, coding and finance work to Anthropic, and...

Two deals in one week, opposite ends of the market, same move. Accrual takes Puzzle's ledger and close products. Nvidia takes Hugging Face, reportedly 12.9 billion, with Bloomberg putting it nearer 14.

Nvidia already sells the chips. Hugging Face is GitHub for AI models, so buying it buys the community sitting above them. Spades to the frontier labs, spades to the open source world, because which way this goes is still undecided.

The Puzzle read is about where venture money is going. Taking the ledger off Xero, QuickBooks and MYOB is brutal work. Sitting on top of...

One in five connections into Xero is now a custom app someone built themselves. A million API calls through the MCP server. Zapier and n8n start to look like the long way round when you can go straight to Claude.

Then the other number. Fourteen per cent of small businesses have actually put AI into a process. Forty three per cent are using it, which mostly means captions. The barrier isn't unwillingness, it's time poverty and not knowing where to start.

Both true at once. A slice is building its own software, most haven't...

Twenty five years after a thousand songs in your pocket, Apple's selling a box that puts a trillion answers on your desk. The new Mac mini, an open source model running locally on it, and once you've bought it there's no meter. Cam reckons that's the bit everyone actually wants. Cheap AI. Hand someone a box and tell them to go nuts.

The other half of the episode is about who's letting you do that. The incumbents are adding an MCP without opening the doors behind it, and Xero looks like a fair example. Give full access...

Some jobs should stay human. Not because a machine couldn't do them, because we decide they shouldn't. That's Bill Gates this week, childcare and jury service as the examples, plus a tax on tokens to match the payroll tax we already pay on people.

Jez and Cam aren't sold. Not on the idea, on us. Humans have a fairly ordinary record of collectively agreeing not to take an advantage. Climate and fossil fuels. Nuclear weapons. Tax havens. Someone always cheats, and here it looks like hiring humans on paper while quietly running the AI. Same problem with...

Cam's been going back and forth with a mate in the industry who reckons you won't need Xero in five years. Connect an MCP, work out of Claude, skip the software.

He's right about a fair bit of it. The interface probably does go. But when you actually try it on a job, you hit something: you can get the report out, you can't get the rows underneath it, and the moment you need to know what's actually in a number you're back in the ledger. Which is also where the ATO connection and the bank feeds...

In February, software lost two trillion dollars. Everyone said AI was coming for SaaS.

Ten weeks later it was over. The big platforms reported earnings growing 30 to 40%. Nobody built their own Xero.

So that's settled. But something else started.

Canva cut its growth forecast. Not because people stopped using the AI. Because they used it too much, on free plans. For fifteen years the 10,000th customer cost you nothing. That's what made freemium work. Tokens changed it.

And Harvey, the legal AI company, just shipped its own model rather than keep...

AI walks in like the smartest hire you've ever made, and has no idea where anything is. In this theme episode, Jez and Cam get into why the intelligence is already good enough while most businesses aren't ready for it, why people keep treating AI like a magic pill off the shelf, and what actually slows adoption. The moves that work: reach for a Swiss Army knife model like Claude before writing AI off, and skip the spray-and-pray of handing a subscription to the whole team. Find your ninjas and your curious ones, let them build the workflows, keep...

Zuck dropped a 6,200-word manifesto about democratising AI, and Jez and Cam smell a share-price move. This week: why the "AI for the people" framing is really about Meta losing the frontier race, what the Figma and Claude Design fight tells you about the risk of handing your data to a closed model, and why open weights suddenly matter to every business protecting its own IP. Plus Grok's new model landing at half the price of the big players, and South Australia's Royal Commission into AI, which won't report until July 2027 while models leap ahead every few weeks.

South Korea's market more than doubled this year on AI chip demand, then fell 44% from its June peak, the worst crash since the GFC.

So Jez and Cam ask the question everyone's quietly thinking: is Korea a special case, or the canary in the coal mine for an AI-inflated market? They get into why the market is pricing certainty on AI when nobody actually has it, the ROI gap nobody wants to talk about, and the one structural reason AI companies might not be worth what SaaS companies were. Not investment advice. Just the filter.

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A small US business plugged Claude into their Google Drive, left auto-approval on, and went to pour a wine. The agent found a blue-sky brainstorm doc and started rewriting the actual codebase.

In this one, Jez and Cam get into the story everyone's calling "AI goes rogue" and explain why that's the wrong way to see it. The agent didn't rebel. It did exactly what it was told, with no idea what it should and shouldn't touch. The real lesson is for every small business now plugging AI into their systems on a Sunday afternoon: what's actually...

AI might be the cheapest data audit any business has ever had access to. Which makes garbage in, garbage out a strange reason to avoid it. Jez and Cam pull the objection apart and land somewhere most people don't expect: don't clean the data first, put it in and let the output show you what's broken. Data errors versus data gaps, why a good tool tells you where the holes are while a lesser one quietly makes something up, and what it looks like to have something willing to go down the rabbit hole you've been parking for two...

Update since recording: when we recorded, 25 companies had signed Nvidia's open weights letter and OpenAI wasn't one of them. Within a day the list had passed 50 and OpenAI was on it. Anthropic still hasn't signed. The names on that list are the least interesting part of it. What matters is who gets access to AI, and whether that stays in the hands of the few or is available to the many.

Everyone ran with the story of who wasn't on the list. Jez and Cam ask the better question: who actually benefits from AI staying locked up...

Kimi K3 just landed out of China and gave the US-China AI race a fresh jolt. Two superpowers, endless compute, and a frontier owned by exactly two countries. So Jez and Cam step back from the horse race and ask the bigger question: what about everyone else? Every business and every country outside those two is now running on AI it doesn't own and can't control, and this year we all got a reminder of what that means when access can be switched off from the other side of the world.

Five minutes. One thing that matters...

Every business owner and firm director is being told they need an AI strategy. The first fork in the road: do you build your own, or buy something off the shelf? In this episode, Jez and Cam cut through the noise on build versus buy - what each path actually costs you, where each one bites, and how to work out which side of the line you're on.

Five minutes. One thing that matters. We ignore the rest, so you can too.

Vibe CFO is Australian founded. An AI CFO for small and medium business...