The AI market — bubble rumors & the push to slow down.
S1E6 | Highlights and impact of this week's top tech themes.
Hi, Friends —
Welcome to [our digital disco]! I’m excited to have you here. Keep scrolling for this week’s key themes in tech news and other misc. thoughts (Snack Time). You can also check out last week’s newsletter here.
Notable Themes
☞ The case to slow down AI.
2,800+ AI experts and CEOs have signed a letter calling for a 6-month pause on AI development beyond OpenAI’s GPT-4. Citing risks to society and the dangers of a runaway AI, the letter calls for the development of safety protocols and regulation. Among the signatories include Elon Musk and Apple co-founder Steve Wozniak. Notably, the letter is spearheaded by non-profit Future of Life Institute (FLI), which is primarily funded by Musk’s philanthropy.
Why does it matter? Many AI experts are increasingly afraid of the technology they’re creating — and even scarier, even those who make these technologies do not completely understand what they are capable of. Notably, despite his serious concerns about the dangers of AI, OpenAI CEO Sam Altman was not among the signatories. His stance implies that he wants the public to trust that OpenAI’s decisions are trustworthy (aligned with humanity’s interests, rather than the company’s profits) and safe (don’t require third party validation).There’s also an argument about the costs to make new AI. Right now, the incredibly expensive process enables few companies (those with the $$$) to build & train these models. More time would help increase competition in the space, so that the ‘power’ isn’t solely concentrated in the leadership of a few companies. But more competitors also implies more difficulty regulating the tech, and increased risk of unethical use or bad consequences.
Pros: The competitive AI market means companies must make and release technology fast, else risk losing to competitors. In effect, developers are less likely to take time to ensure the safety of products before releasing them to the wild. A moratorium on advanced AI development could give innovators time to safety-check systems, and regulators the opportunity to create guardrails that verify its safety and limitations before released to the public.
Cons: The letter sparked a debate about the intentions of the signatories, particularly Musk and other tech moguls. Safety reasons aside, tech leaders have other reasons to benefit from a moratorium: time. In the current scenario, the pace of AI development is so rapid that companies are struggling to keep up. A slowdown in AI development would provide them with time to enhance their tech and catch up with their competitors — behind closed doors — which could lead to stronger competition in the long run.
☞ Is the AI market forming a bubble?
The market for AI is ballooning, and the potential for high returns has many investors racing to find the next big deal. VCs* are pressuring start-ups to develop innovative AI technologies, leading to increased competition and rising valuations. Total VC investing in AI has exceeded $256B over the last decade, and the rate is increasing quickly. The ongoing argument, however, is whether AI’s promises will live up to their claims. The stake is high, given the many who are pointing to AI as the solution to all our problems (and backing those beliefs with money).
Why does it matter? Some economists believe that AI is a bubble, meaning that the companies receiving attention and funding are overhyped — and that the expected returns won’t materialize. Investor FOMO might also be driving some bubble-like valuations (e.g., Character.AI w/ $1B, Stability AI w/ $4B) and increased AI spending by larger firms, too. TLDR: If AI doesn’t deliver as expected — whether due to general overhype, geopolitical issues, or the end of Moore’s law — it could be a sign the AI market is a bubble… and lead to reduced innovation, development, and adoption of new technologies.
Pros: The global huge push towards AI exhibits the large hope in its potential. Just in 2022, the Big Five (Google, Amazon, Apple, Meta, Microsoft) spent $223B on AI R&D, up over 100% since 2019. And in many ways the investments are working, as we’ve seen with the large success of new products such as ChatGPT. The expansion of AI spending also increases its potential to expedite discoveries in domains, from cancer research to sustainability and energy optimization. On the other side, some speculate that an AI bubble could also have its own benefits. If the bubble bursts, it could lead to a more rational and sustainable development of the AI industry, and benefit the industry and society in the long run.
Cons: Many investors are cautious about the AI sector, citing worries that excitement about its potential may far outpace the reality — and, once the two catch up, cause a crash. Many start-ups also rely on the foundation models of OpenAI and other large companies, increasing their risk and potentially lead to an oversupply of similar products and services. Finally, AI relies advanced hardware from global supply chains, making a potentially fragile ecosystem. Disruptions in global trade — such as geopolitical tensions — could alter the supply of necessary components, significantly impact the industry's growth and development, and cause a sharp downturn in the market.
Other Highlights
Clearview AI, a facial recognition firm that has been banned in numerous countries and some US states, has now conducted nearly one million searches for US police — and scraped some 30B images from social media platforms without users' permission. Some say police use of Clearview puts everyone into a "perpetual police line-up" and uses invasive, unconstitutional practices.
Today's old folks set to smash through longevity records. A recent study suggests that individuals born between 1910 and 1950 have the potential to extend the current "human mortality plateau" by up to a decade, indicating that the biological limit of the human body has not yet been reached.
The Capitol Hill hearings on the recent bank collapses are over, prompting the question: Now what? The changing dynamics may provide more opportunities for neobanks and FinTechs, which provide digital banking services through alternative (e.g., marketplace, app-driven) models.
Snacktime
📓 Reading: The NYT’s interview with Google CEO Sundar Pichai. It’s an interesting view into Google’s excitement about AI innovation and global benefits, commitment to responsible development, and reaction to how a start-up (OpenAI) beat Google in kicking off the AI arms race.
♬ Listening to: little luna’s shift & go.
✰ Thinking about: Upskilling. How can we incentivize businesses to ensure they are upskilling their workforce before — and even after — automation slims down opportunities? Will this finally be the push that helps people-facing roles (e.g., caretaking, teaching) be compensated more fairly? How will we need to reframe our conceptions of income as automation snowballs?
Next up
✎ Space and spyware. And whatever happens throughout the week, of course.
✿ As always — any and all feedback is welcome! In the meantime: give someone a hug and say an ‘I love you’ this week. Make the world a little happier.