This week there are conversations about whether hype around generative artificial intelligence he is sentenced to death.
Novel reports from Novel York Times AND Wall Street Journal It’s critical to note that many of the AI startups that have absorbed tons of cash from venture capital firms over the past few years have yet to find viable business models.
The Journal suggests that investors mistakenly believe that every startup will be like OpenAI (i.e., wildly successful). He points to newcomers like Imbue, Character AI and Magic AI who earn little or no money:
Venture capitalists are betting that some of these startups will pioneer a technological revolution that could even eclipse the birth of the Internet. They point to the rapid development of OpenAI, whose ChatGPT chatbot has become the fastest-growing consumer application in the history of the Internet. OpenAI’s revenue grew from zero to over $1 billion last year, a rapid pace of growth even by Silicon Valley’s breakneck standards.
So far, few other startups with similar ambitions have managed to repeat this success.
The Times says the problem for such startups is not just the difference between expenses and revenues, but the fact that they will have to compete with Huge Tech giants:
In Silicon Valley, it is becoming clear that the artificial intelligence revolution will come at a very high price. And tech companies that have staked their future on it are trying to find ways to narrow the gap between those expenses and the profits they hope to achieve in the future.
This problem is particularly acute in the case of a group of prestigious start-ups that have gathered dozens of startups billions of dollars for developing generative artificial intelligence, the technology behind chatbots like ChatGPT. Some of them are already convinced that competing directly with giants like Google, Microsoft and Meta will require billions of dollars – and even that may not be enough.
We wrote here that this moment of AI hype will indeed eventually pass. It will take much longer to develop and implement Generative AI technologies into the fabric of our daily lives than some investors think, which will lead to a sense of disappointment. But this is what happens with most novel technologies (see the metaworld and autonomous vehicles). And the analysts we talked to last month I don’t think there is an AI bubble that will burst like the dot-com era in the 1990s.: :
Like any novel technology, AI may be in its “hype” phase. This does not mean, however, that the values of all artificial intelligence companies are overvalued. [D.A. Davidson analyst Gil Luria] he said.
…Even among experts who see an artificial intelligence bubble emerging, many say it won’t end as badly as the dot-com burst. Richard Windsor, founder of research firm Radio Free Mobile, said people are using “complicated and untested methods to justify very high valuations [AI] companies” as it was in the dot-com era.
But, as he said, “the bursting of the Internet bubble [was] worse than the bursting of the AI bubble.” This is partly because even in its “immature” form today, artificial intelligence is capable of generating much more revenue than the Internet did in the 1990s and early 2000s. The Internet in the 1990s was “very tardy,” he said, “and it took a long time to realize” its full potential. Windsor, meanwhile, said he sees AI’s full potential as ultimately circumscribed. Even if the AI bubble bursts, “what the Internet will become will be greater than what AI will become in its current form,” Windsor said.
Read our full story and find out why the AI craze is not an internet bubble.
