The AI Sorcerer's Fallacy

There’s a growing belief among some AI enthusiasts that every problem can be solved by an LLM by using the right prompt. If the output isn’t good, they say, you just haven’t phrased your prompt correctly yet.

This attitude borders on magical thinking. Like ancient sorcerers who believed words held intrinsic power, they hunt for the perfect incantation, expecting AI to conjure up a working app, solution, or strategy… No real human understanding required.

This is an illusion. We are not there yet.

Charlie Munger famously said:

To the man with only a hammer, every problem looks like a nail.

He used this metaphor to critique narrow thinking: people over-relying on a single mental model tend to oversimplify reality, ignore nuance, and fail to engage with the complexity that real-world problems demand.

AI is not a hammer. It’s a toolbox, useful only if you know how to use it. Without domain knowledge, the output will be often shallow, wrong, or misleading, no matter how well you craft your prompt. Moreover, you won’t realize it and think you’ve got a meaningful answer.

The most effective AI users aren’t prompt wizards. They’re the domain experts. Domain experts don’t treat AI as a replacement for understanding but as an amplifier, an assistant, a way to explore different angles to a problem.

AI can do extraordinary things. But if you treat it like a spellbook, don’t be surprised when the results are mostly smoke and mirrors.