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Generative AI Is Having Its Herbalife Moment

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Why This Matters

This article highlights the growing influence of generative AI startups like Replit in the tech industry, especially through targeted social media advertising that emphasizes individual empowerment and entrepreneurial potential. It underscores how AI tools are being marketed as accessible means for consumers to create software, potentially transforming personal and small business productivity. However, it also draws a cautionary parallel to multi-level marketing schemes, raising awareness about the underlying recruitment-driven business models that may accompany these AI platforms.

Key Takeaways

Over the past few weeks, I’ve noticed that TikTok has been serving me ads for Replit — one of the many vibe-coding startups that have emerged in the past couple of years, and that serve as a glorified wrapper for models from Anthropic, OpenAI, and Google.

Now, TikTok can be a weird place at times. It’s full of companies trying to sell things to an audience that can not — and will not — ever buy them. Things like industrial-grade glycine, graphite cubes, and lightly-used oil tankers.

I usually just laugh at those ads and move on with my day. And, in comparison, Replit isn’t as outlandishly batshit as the idea of someone trying to sell a graphite cube — the kind that looks like it might feel at home in a Soviet RBMK nuclear reactor — to a bunch of hyper-online gen-Z.

The ads — many of which were produced by influencers with brand deals, and can be found by searching “replit” and “#ad,” or #replitpartner — typically follow the same format. You have a beautiful person going about their day, having an idea, and then prompting it into existence with Replit.

The message is simple — you, yes you, can make software, and that software might make your life some level of better, or more convenient.

Or, that software might become the side-hustle that helps pay your rent, or even, if you’re lucky enough, makes you rich.

Where have we heard this before?

History Rhymes

Around the 1920s, the world was introduced to the noxious and hateful idea of multi-level marketing. The way it works is simple — a company will have a product, like health supplements or plastic food containers, and they’ll get ordinary people to act as their marketers and salespeople.

There’s very little money in actually selling product. If you want to make real cash, you need to recruit other salespeople. Every new recruit — often referred to as the “downline” typically brings in a one-time bonus, as well as a cut of every bit of product they sell.

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