I’ve seen reports and studies that show products advertised as including / involving AI are off-putting to consumers. And this matches what almost every person I hear irl or online says. Regardless of whether they think that in the long-term AI will be useful, problematic or apocalyptic, nobody is impressed Spotify offering a “AI DJ” or “AI coffee machines”.
I understand that AI tech companies might want to promote their own AI products if they think there’s a market for them. And they might even try to create a market by hyping the possibilities of “AI”. But rebranding your existing service or algorithms as being AI seems like super dumb move, obviously stupid for tech literate people and off-putting / scary for others. Have they just completely misjudged the world’s enthusiasm for this buzzword? Or is there some other reason?
Hype brings investment money to the table. When an emerging technology appears, you can say we are looking to develop those technologies into our existing products and you will see a bump up in your share price.
After a few years of failed products and the hype dies for the next thing you can never mention the old hype but keep the bump in share price.
Think about 5-7 years ago, Blockchain was all the hype, 5-7 before then was Machine Learning and XaaS, before that was Big Data.
Yeah, investors kind of amplify hype. When there is hype, you will have some investors investing money.
If there’s investors investing money, it makes sense for other investors to try to invest first, so that their invested money gains value (the share price rises).
And then it becomes somewhat of a self-fulfilling prophecy, because suddenly you do have companies equipped with money to pursue that hype, which can feed back into the hype.But similarly, you’ll eventually reach a point where it does not live up to the inflated hype and then shareholders can just as well be extremely quick to pull out their money and amplify the crash.
Investors also know not every product will sell. So pad the bet and spread wide to increase your chances to score big.
The dumbest part about all of this is that the “AI” that’s currently building up all the hype is just machine learning
My understanding is that a lot of venture capitalist funding is driven by gut feel and personal connection. Like, they’ll tell you that they’re the vanguard of the future with a vision, but most of the time they’re just cliquey bros going “dude, sick” and burning money.
There’s an anecdote in the book “the cold start problem” about how zoom got funding even though the guys funding it thought it was a solved problem, that a new video company wouldn’t go anywhere, but the zoom guy was their bro so they gave him millions of dollars.
I feel like it’s possible some future will look back at this the way we look at feudalism. Just like, that’s such a bad system , why did people put up with it?
Just like, that’s such a bad system , why did people put up with it?
Because hindsight is 20/20 and people had preconceptions back then that filled in the gaps, as they do right now.
The gaps are and were actually full of nonsense like “he’s my buddy I’ll give him money” but people expect the process to be a lot more reliable and solid, because they think they’d be more careful with that kind of money, not realising that to some millions are pocket change (and nobody is careful with pocket change) and that others gamble with other people’s money and thus are a lot more cavalier.
Suits heard about this secret sauce called AI that can cut down on the need for those pesky humans that are always looking for handouts and luxuries like a living wage and benefits. The consumer will have to accept it when the only choices they’re offered are varying flavors of the same shit.
(but also it doesn’t work and they are, in fact, just dumb)
And then when it doesn’t work, you blame other people and fire humans anyway and give yourself a raise for saving the company money. Stock prices rise.
Can confirm this is absolutely true. The number of meetings I’ve been in where execs are salivating…
Whereas in reality so far the payoffs are projected to be something like 2%. Not counting the costs of developing and running the AI stuff.
Attracts investors.
When people are evaluating companies, and see a company missing out on the current trend, how is that going to factor into their valuation of the stock prices?
It hypes investors. Investors are the customers.
Because the boss thinks it sounds cool and doesn’t want to be the only kid in the block without an AI product to sell.
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OpenAI struck gold, NVIDIA followed suit, and everyone else bought shovels hoping to get investors even though they have no plans on striking gold (developing useful AI).
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Would you like to buy a timeshare to the moon? If we all buy, you’ll be able to sell your spot for 10x the price! Don’t wait! Spots are limited!
Nvidia is the biggest shovel seller out there.
Nvidia sells the hardware (shovels), but also develops portions of the software to make it run more efficiently, like OpenAI. Nobody else but Microsoft seems to be actually developing software, though AMD is slowly working towards having comparable performance.
We kinda need to adapt the saying now. When someone finds gold, you need to sell wood and iron for all the shovel makers that will show up.
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Money was already spent. The hype companies were backed by big capital in their early days. Now the people who provided that capital want to cash out and they want their winnings. So you will have AI shoved down your throat on every piece of media channel those people also own. AI is a hype term that appears periodically since before the 2000s. This is nothing new. https://en.m.wikipedia.org/wiki/AI_winter
LLMs are toys that sparkle for a brief moment. Their value is laughable compared to their cost.
They believe that demand and offer in the market is an egg and chicken situation, so right now they’re force feeding us the offer waiting for the demand to adapt
A lot of business people also think that AI is a “force multiplier” meaning that if they use it they can get more done in less time. Anything that can do that is basically a money printer at the business level, which is why all these execs and companies are so excited about it.
The problem is it’s not or at least not reliably proven to be so. All these companies are jumping on board thinking “shove some AI in there and get 20% growth” when in reality there’s no backing behind it working like that. And that’s why a lot of customers are turned off, because from the consumer side, AI is just sloppy unoriginal junk. But on the business side they just see “Productivity is up” never mind that the productivity is garbage quality.
It was super cool for like three weeks. Now it’s the gambler’s fallacy they’re hanging on to.
Ohhh, you fn nailed it. Nice comparison.
It attracts investors in the company not customers.
Think like a venture investor.
A small chance of huge growth via new technology can have a big payoff. They expect most companies to fail and are more worried about missing an opportunity than losing money in a single bad investment.
Nobody is quite sure where AI technology will be in ten years, but if it’s big, it’s going to make people who got in early very rich. It doesn’t matter that it sucks now; the web sucked in 1995, but it made people who got in (and out) at the right time very rich.
Because it attracts shareholders
It’s a “don’t want to miss the ship” thing where companies have to invest in whatever’s trending in case it becomes successful and gives you an advantage. If they wait until it’s proven, they might miss a competitive advantage (having to start learning after others). In the case of AI it’s even more important since the promise sounds actually useful (the summarize anything quickly bit at least), unlike, say, NFT. At least that’s kind of how it got explained to me at one of my jobs.
