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I love it, you love it, we all love it: Fact-based analysis that help us understand the most pressing topics of our time. While we mostly leverage our data-driven tech stack for sourcing and screening of exciting investment opportunities, a core component of our work is also to spot and properly diligence market trends.
Today, I’m excited to have
share a thought-provoking guest article about the true state of AI. Daniel was one of DoorDash’s first 150 employees and among their first data science hires. As the author of , he regularly dissects the hottest topics with data-centric analysis and makes them digestible for you and me.Thanks a lot for sharing your insightful perspective on the hype around AI with us below, Daniel!
Is AI The Next "Next Big Thing"?
On November 2nd, 2022, crypto news site Coindesk published an article analyzing a balance sheet from Sam Bankman-Fried's trading firm, Alameda Research. The piece raised questions about the financial underpinnings of Bankman-Fried's crypto empire, inducing widespread fears of insolvency and the comingling of consumer funds. This 450-word article kicked off a series of events that led to Bankman-Fried's downfall and the rapid collapse of the industry's second-largest centralized exchange.
The ensuing media response saw news outlets dancing atop the crypto industry's metaphorical grave:
From Vox: Sam Bankman-Fried's trial pulled back the curtain on crypto
From the NYTimes: Crypto Goes on Trial, as Sam Bankman-Fried Faces His Reckoning
From Bloomberg: Court Is in Session for Sam Bankman-Fried, and Crypto
The Bankman-Fried saga proved an ostensibly definitive coda to years of prophecy surrounding the metaverse, decentralized finance, and the NFT-ization of all assets. Mainstream adoption was highly unlikely (at least any time soon). To many, crypto would be remembered as a sensationalistic fad.
Coincidentally, the same month as Bankman-Fried's collapse, a relatively unknown startup called OpenAI released a prototype chatbot called ChatGPT. Within two months, this no-frills tool had garnered over 100 million monthly active users. In February of this year, a reported $4.7 billion was invested in the AI sector, nearly 25% of all global venture funding. With the introduction of one spartan chatbot, artificial intelligence had become the next big thing.
And yet, despite the rapid mainstreaming of AI tools like ChatGPT, Perplexity, and DallE, skepticism abounds. Is this another instance of irrational exuberance? Is this going to be just like crypto?
Indeed, the arrival of large language models and generative AI has spawned many questions regarding the technology's usage, economic potential, and destructive power. So today, we'll examine AI's adoption and reception from two perspectives:
The Usage of AI Tools: Are large language models experiencing increased utilization? Is the AI hype (quantifiably) justified?
Widespread Interpretation of AI's Potential: How are people responding to this recent wave of innovation? What are the perceived future implications of today's progress?
Quantifying AI Adoption
Product enthusiasts often wax poetic about crafting "magic moments" for their users—an instant so delightful that it hooks consumers to that service for life. In my father's case, his ChatGPT magic moment involved a poem about 1980s baseball star Mike Schmidt (a decidedly obscure choice).
Until this point, my dad had primarily understood large language models through media coverage; naturally, he was skeptical. So he gave ChatGPT a prompt he thought impossible: "Write a poem about Philadelphia Phillies all-star third baseman Mike Schmidt in the style of Dr. Seus."
Watching a chatbot craft poetry about his baseball hero tinged with the whimsy of Dr. Seuss proved the most magical of magic moments. With a few catchy rhymes, my father had been converted into a ChatGPT believer.
Since its launch in late 2022, ChatGPT has been responsible for millions of magic moments. Despite the app's minimalist design, OpenAI's chatbot surpassed 1 million users just five days after launch and became the fastest app to acquire 100 million users (though Meta's Threads would break this record a year later). ChatGPT's surge into the mainstream was undeniable, but would the allure surrounding this wave of innovation fade? Would generative AI tools see continued adoption? The answer is yes.
Over the past year, ChatGPT and other popular LLMs have added tens of millions of users, rapidly integrating themselves into the workflows and hobbies of everyday consumers.
A significant driver of LLM adoption lies in their ease of use, as programs like Perplexity and Claude are functionally similar to query engines like Google and Bing. You don't need to understand decentralized wallets, blockchain addresses, and the nuances of staking tokens—you just need to type a prompt.
Over the past year six months, ChatGPT has experienced increased adoption across all age demographics—even in the +65 category. People want to know what all the fuss is about.
A significant portion of AI adopters use these tools frequently, with 22% of YouGov survey respondents reporting weekly or daily usage—an astounding figure for such nascent products.
In August 2023, vaunted research firm Gartner placed Generative AI in the "Peak of Inflated Expectations" segment of its Hype Cycle for Emerging Technologies report.
Gartner characterizes this "Peak" stage as follows:
"A wave of "buzz" builds and the expectations for this innovation rise above the current reality of its capabilities. In some cases, an investment bubble forms, as happened with the web and social media."
While I don't love this framework or its attempts to present qualitative analysis objectively, I agree that the perceived impact of AI is at an all-time high. The range of future outcomes and the timeframes for these forecasts are wildly unclear. At the very least, generative AI tools will help us "hack" our productivity, and at most, these innovations spell the end of the human race.
As a result, "AI" serves as shorthand for two distinct phenomena: 1) the simplistic AI tools we use today and 2) an abstract force for economic and existential destruction. Suggestions of apocalyptic doom have increasingly dominated the public consciousness, prompting an intractable collective action problem and fostering a very different kind of hype.
Quantifying AI Anxiety
The 1956 Dartmouth Conference marked the birth of AI as a formal academic discipline. American computer scientist John McCarthy coined the term "artificial intelligence" amidst conference discussions of natural language processing, neural networks, and the potential for machines to learn and solve complex problems.
Unlike social media or crypto, humans have been wrestling with AI and its societal implications in the seventy years leading up to this recent wave of innovation. Theorists, computer scientists, novelists, and film directors have been dissecting the ramifications of artificial intelligence since the mid-20th century.
In fact, much of the general public's understanding of AI stems from media construction delivered to us by popular culture. Whether it's Skynet from The Terminator, Hal 9000 from 2001: A Space Odyssey, or the robot from Ex Machina, the most vivid characterizations of this technology consistently depict artificial intelligence as an uncontrollable societal plague that will eventually run amok.
The recent wave of LLM innovation has rendered these fictions prophetic, inducing widespread anxiety about the implications of such rapid progress. A survey of over 7,300 global consumers by research firm MACRO identified widespread fears that AI systems will spur job loss, extinction, and social discord.
Bizarrely enough, this survey also reveals a prevailing belief that AI will make our lives easier—illustrating the cognitive dissonance between today's tangible utility and intangible far-off destruction.
Similarly, YouGov polling reveals that recent advances mainly evoke anxiety, including "caution," "concern," and "skepticism." I doubt you would have observed these reactions after Steve Jobs introduced the iPhone.
The first overwhelmingly positive emotion on this list is "excitement"—the sixth-ranking response. It's as if most people have bypassed today's benefits for visions of future suffering.
Stranger still, these prognostications stem from a populous that is still relatively unfamiliar with today's AI tools.
While 22% of aforementioned survey respondents reported using AI tools daily or weekly, the other 78% admitted to using generative AI infrequently or not at all. Furthermore, most interactions with artificial intelligence involve text-generating tools and chatbots—a small sampling of all potential use cases and a far cry from Skynet.
It's fascinating how one chatbot—a prototype with limited functionality—can prompt cascading societal panic. Perhaps this is how it felt when Sputnik launched—a single advancement representing the dawning of a new age and a new thing to worry about.
Perhaps the most absurd facet of this widespread angst is that AI, in the broadest sense of the term, has been operationalized across numerous products for some time. A late 2022 Pew Research survey found that few consumers consistently recognize mainstream products that use artificial intelligence.
Ultimately, "AI" has multiple connotations, one grounded in technological criteria and one related to sociopolitical anxieties. Personalized Spotify recommendations do not replicate human characteristics and are therefore non-threatening, while ChatGPT is reminiscent of maleficent AI actors such as Hal9000 or The Matrix's Agent Smith.
Final Thoughts: Hype in the Age of Robota
"R.U.R" (Rossum's Universal Robots) is a science fiction play written in 1920 by Czech writer Karel Čapek, which introduced the word "robot," derived from the Czech word "robota," meaning forced labor or drudgery. The play is set in a factory that manufactures artificial people called robots, who are initially created to serve humans but eventually gain consciousness and revolt, leading to the extinction of the human race. Čapek's play predates AI's conceptual birth, and yet, somehow, this work seeds our cultural myths regarding its destructive potential.
Hype and anxiety are two sides of the same coin—these emotions stem from a gap between present capability and future possibility. In crypto's case, our current state involves asset speculation and the trading of digital monkey tokens, while future state could see the rise of a new-fangled financial order. For AI, the range of possibilities is so broad and unknowable that we can't help interpret recent advances through the prism of existing cultural myths—that humanity will create systems so advanced that they will spur our demise.
Perhaps much of our present anxiety stems from our potential to intervene (or lack thereof). Movies often rhapsodize of a lone hero capable of preventing a wicked AI actor. In reality, AI development and regulation is a collective action problem that robs individuals of their autonomy. We are not Arnold Schwarzenegger, Tom Cruise, or Neo; we're just people reading headlines on the internet.
Like the space race, nuclear proliferation, or Y2K, we possess little control—no matter how many AI newsletters we read. In the meantime, we'll reap the rewards of a ChatGPT subscription and ponder our AI-driven demise. The future may entail extinction, so we might as well enjoy today's innovations—perhaps in the style of Dr. Seuss.
This is it for today. I hope you enjoyed this guest post and took away one or two facts about the true state of AI. If you like to read more pieces like this, check out
Stay driven,
Andre
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This was a thought-provoking analysis looking at the hype around AI