Why I'm pessimistic even if the bubble bursts
I think the core value proposition of "AI" is not necessarily its correctness or "thought" but rather its ability to ingest vast amounts of data without human intermediaries and produce speciously authoritative outputs based on the inputs. "AI" is obviously already very good at this so even if the more sci-fi claims don't pan out it will still remain an integral and harmful part of our society.
Why are these attributes useful apart from their claims to correctly analyze reality? Here's a non-exhaustive list
Disciplining, demoralizing, and disaggregating workers by isolating them in front of a chatbot, overwhelming them with LLM-generated outputs and bypassing recalcitrant middle managers and senior technicians to get information and make decisions. All this serves to reinforce power in the hands of the C-suite and investors.
surveillance and flagging - stuff like Flock cameras are obvious use-cases, but there's lots of old-school tech like credit checks, resume screening, background checks, air-strike targeting etc. that can get a face-lift with LLMs. False positives and biases are either acceptable costs or even broadly beneficial to the elites for reinforcing existing hierarchies
propaganda - Generated video, text and images is valuable for both governments and right-wing corporate propaganda. The chatbots themselves can also be directly influenced, see for example how Grok was conceived as an alternative to "woke AI".
The assumption is that if "AI" hurts business efficiency that it will automatically be dropped but I think history and even the present-day shows that maintaining control and hierarchies overrides efficiency. For example the present hysteria-driven immigration crackdown is not "efficient" for business yet it has proven durable and even gets support from some of the richest businessmen in the world. Another example in the past might be how slavery and Jim Crow racism stifled the modernization of the American South's economy while being overwhelmingly supported by the white South's business interests. So I think businesses and government will accept a great deal of inefficiency in order to reap the benefit of these tools.