The hype, as they say, is real with AI.
Everyone is bullish on the potential created by generative artificial intelligence (AI) applications such as OpenAI’s ChatGPT and its slew of competitors and alternative contenders. When ChatGPT was released late last year, more than 100 million users signed up within two months. Since then, Alphabet Inc. (Google’s parent company) redoubled efforts to develop its own version called Bard. Shares of chipmaker Nvidia Corp. are up almost 200 percent since Jan. 1 due to the importance of its products to the AI sector.
All of this has created some hyperbolic declarations from experts. Some consider the current AI movement the beginning of the so-called fourth industrial revolution, as important or more impactful than the internet itself. Millions of jobs could be overtaken by AI bots, and many companies investing in this space will be minted while many companies could be wiped out. Professions from Hollywood scriptwriters to corporate lawyers could eventually be replaced by AI applications.
AI has singlehandedly led the Nasdaq Composite’s significant gain of 32 percent through June 30, during a period of high inflation and high interest rates—typically anathema to growth-focused tech stocks. Never mind that the U.S. economy is staring at the largest economic contraction since 2008.
Which brings me to my question: is the hype too much?
To be sure, ChatGPT is very impressive. And the technology behind it holds immense potential. I’ve used it to help draft a recommendation letter for a younger colleague for business school. The result is a passable missive, but certainly nothing too inspired.
But at the moment, it feels very much a novelty. Certainly not able to replace millions of jobs or become “world-changing.” It may be possible, but certainly not a foregone conclusion as the experts would have you believe.
I’m reminded of the most recent technology hype before ChatGPT: the metaverse. And then slightly before that, the blockchain.
The blockchain was supposed to be revolutionary, changing the way the world conducts business. Everything from banking, payments, accounting, to real estate would be revolutionized by the distributed ledger technology. Decentralized exchanges would eventually replace centralized stock exchanges and networks.
That was all the rage five years ago. A little-known ice tea beverage company on Long Island changed its name to Long Blockchain Inc. and announced that it would begin investing in and implementing blockchain and cryptocurrencies in its business. Its stock price immediately shot up.
Deloitte’s 2021 Global Blockchain Survey revealed that 80 percent of all companies believe blockchain would enable new revenue streams. And that if you’re a business leader and you’re not implementing blockchain, then you’re missing out and the world is passing you by.
Today, it’s safe to say that blockchain has not revolutionized much. Bitcoin and cryptocurrencies are still around. But aside from a few proofs of concept, no company’s fortunes have been materially changed by implementing blockchain technology.
And the fate of Long Blockchain? The firm was delisted from Nasdaq and in 2021 the Securities and Exchange Commission filed insider trading charges against a few major shareholders of the company.
Metaverse was another recent hype. Facebook founder Mark Zuckerberg believed so much in the potential of virtual worlds that the company changed its corporate name to Meta Platforms.
Proponents believed we’d all be wearing VR headsets and holding meetings in virtual worlds, buying virtual products such as NFTs and virtual homes, and owning a stable of avatars in game worlds with their own economies. If you believe in that future, then the economic promise of the metaverse is immense. And unlike the reality we live in, there can be an unlimited number of virtual worlds to populate and live in, limited only by computing power and one’s imagination.
But sitting in 2023, the outlook on the metaverse is decidedly different.
Since its name change was announced in October 2021, Meta’s stock price has declined 13 percent through June 30. And that’s after a tremendous 138 percent increase during year-to-date 2023.
A survey released prior to the Game Developers Conference earlier this year unveiled that 45 percent of game developers—the people and companies behind metaverse’s development—felt that “the metaverse concept will never deliver on its promise.” Ouch.
Want another example of an unfulfilled promise? The 3-D printing industry. Some experts thought by now every family would have a 3-D printer—as ubiquitous as a microwave oven—delivering household items on demand such as food (chicken nuggets) and replacement parts (drill bits).
But nearly a decade after the initial advent of 3-D printing, the technology still only occupies a niche corner of the manufacturing industry.
These examples aren’t to state that AI won’t be as revolutionary as some experts suggest. There are a lot of discussions about this technology across companies and governments. Further investments, development, technological consensus, and above all, regulatory oversight and moral clarity on necessary guardrails are needed.
At the moment, AI’s risks are as massive as its potential. We won’t know until ten years later whether AI’s impact is more akin to the internet or the Google Glass.
