The Interpretation Gap: Why Capability Is Outpacing Trust, and Valuation Is Paying the Price

The Interpretation Gap is the growing disconnect between AI capabilities and how people, markets and institutions understand, trust and value them. This gap isn’t a communication issue but a systemic failure in translating advanced technology into shared mental models. As AI evolves faster than human comprehension, confidence collapses before performance does, leading to stalled adoption, eroded trust, and undervalued potential. Organizations often invest in AI tools but neglect workflow redesign, governance and interpretation, causing shadow systems and internal distrust. Closing this gap requires Narrative Architecture—defining accountability, decision-making under ambiguity, and aligning capability with comprehension. Companies like Disney succeed by governing interpretation early, reducing confusion and mispricing. Ignoring this gap leads to fragile momentum, investor hesitation, and valuation compression. The real risk isn’t competition but invisibility through misunderstanding. Markets price what they can explain, and interpretation, not just capability, drives trust and valuation.