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October 30, 2025

By Johan de Villiers.

Welcome to our latest quarterly newsletter. In our final newsletter for 2025, I decided to do a bit of research on something called, the “Cargo Cult” from World War II and how that translates into the modern day frenzy of building massive, energy hungry datacentres, fuelled by an over-abundance of AI investments.

The Rituals of the New Cargo

Every year on a remote Pacific island, men with “USA” painted on their chests march with bamboo rifles. They gaze at the sky, waiting for a messianic figure named John Frum to return in an airplane filled with miraculous goods, or “cargo”. It’s a ritual born from a profound culture shock during World War II, when islanders witnessed American GIs perform strange drills and then, like magic, receive mountains of supplies from the sky.

Thousands of miles away, a similar ritual unfolds. In Silicon Valley, investors pour billions into artificial intelligence, convinced that if they build enough infrastructure—massive, power-hungry data centres—a new kind of cargo will arrive: world-changing Artificial General Intelligence (AGI) and unimaginable profits. This isn’t just a tech boom; it’s a modern cargo cult, driven by the same blend of faith, mimicry, and a misunderstanding of cause and effect.

From Bamboo Runways to Data Centers

The original cargo cults weren’t born from foolishness. They were a logical response to a world turned upside down. When Melanesian islanders saw soldiers marching, raising flags, and chanting, they observed a clear correlation: these rituals were followed by planes landing with refrigerators, Coca-Cola, and medicine. Their conclusion? The rituals caused the cargo to arrive. So, they built their own mock airstrips and bamboo control towers, perfectly imitating the form of what they saw, hoping to summon the goods for themselves.

Today, the tech industry is doing the same, just with more expensive materials. The “ChatGPT moment” was our version of planes appearing in the sky—a technology so advanced it felt like magic. In response, a global frenzy to build the prerequisite infrastructure has begun. Venture capital funding for AI companies soared to over $100 billion in 2024, an 80% jump from the previous year. Tech giants are spending tens of billions on massive data centers, the digital equivalent of jungle runways. The core belief is the same: if we build it, the cargo will come. If we assemble enough computing power, AGI and its promised economic boom will inevitably emerge.

The Performance of Progress

Beyond the physical build-out, the corporate world is engaging in its own mimetic rituals. Just as islanders marched with wooden rifles, companies are now performing “AI adoption”. Startups and legacy corporations alike are rebranding as “AI companies,” issuing press releases about their “GenAI transformation,” and hiring “AI Strategists”.

The problem is that much of this is just for show. Surveys show that while the vast majority of organizations have AI initiatives, less than a quarter report any real business impact. This focus on the external trappings of AI—the buzzwords, the pilot programs—without a deep understanding of the underlying technology is the modern equivalent of painting “USA” on your chest. It’s a symbolic act of faith in a powerful, poorly understood force, done in the hope of summoning its benefits.

When the Planes Don’t Land

The central flaw in both the Melanesian and Silicon Valley cults is mistaking mimicry for substance. The islanders copied the rituals of military logistics but missed the global industrial system that actually produced the cargo. Today, we are making a similar mistake with AI.

Large Language Models (LLMs) are experts in linguistic mimicry. They are statistical pattern-matchers, trained to predict the next most likely word in a sentence. They can generate text that sounds impressively human, but they have no genuine understanding, reasoning, or grasp of truth. This is why they “hallucinate” facts and produce unreliable output. We’ve become mesmerized by a sophisticated parrot and mistaken it for a sage.

This disconnect between appearance and reality is starting to show. AI startups are hitting astronomical valuations without clear paths to profitability. A staggering 95% of corporate generative AI pilot programs are failing to deliver significant revenue. The promised productivity boom has yet to materialize in the broader economy.

So, what happens when the hype fades and the cargo doesn’t arrive? The history of the original cults offers a clue. Some movements simply fizzled out, leaving behind disillusionment as followers neglected their farms for a utopia that never came. But many others didn’t just disappear. They adapted, modifying their beliefs and evolving into lasting local churches or political groups. The John Frum movement, for instance, still exists today, a testament to the resilience of belief.

The AI bubble will likely follow a similar path. A market correction will wipe out companies built on pure hype. But the underlying technology, for all its limitations, is genuinely useful for specific, narrow tasks.1 The future of AI probably isn’t a magical, all-powerful AGI descending from the cloud. Instead, it will be a more sober, practical process of figuring out how to use these powerful new tools to create real, measurable value. The challenge is to stop building bamboo airplanes and start engineering things that can actually fly!

Ending off, please take a listen (or a look!) at our new Podcast series, JDV on Air! As you now by now, we like to keep our marketing fresh and original, with a specific aim of providing thought knowledge to our clients.

It is available on all the major platforms, including Youtube, Spotify and Apple Podcast.

Listen now on your favourite platform:

We aim to interview interesting guests monthly, with a flair for adventure, coupled with solid business and life advice. Your constructive feedback is always appreciated!

As always, thank you for your continued support of First Technology, Western Cape.

Warm Regards,

Johan de Villiers
CEO
First Technology Western Cape