AI Is in a Weird Place Right Now
Three years into AI mania, things continue to be volatile. The items capturing buzz continue to evolve while consumers are looking at AI with increasingly divergent viewpoints.
Consider the following AI developments that have been on my radar:
Chatbot platform craze has cooled. Efforts to turn chatbots into new-age digital platforms are not going as smoothly as some companies planned. The idea of using apps within ChatGPT, not surprisingly, has flatlined. The same goes for agentic commerce. Walmart provided the latest evidence that chatbot usage isn’t trending like some proponents hoped – purchase conversion inside ChatGPT was one-third the rate of purchase conversion on Walmart’s website.
Mania has turned to utility agents. OpenClaw and Claude Code are grabbing the buzz that previously went to consumer-oriented chatbots. In the process, AI utility has become more niche and difficult to access for the mass market. ChatGPT usage
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The Next AI Phase Is Taking Shape
We are a full two-and-a-half years into current AI mania, and signs point to us entering a new stage. There is a greater focus on product and competition as the most formidable AI start-ups go after branding and users. In addition, Big Tech companies are looking to keep existing users by integrating AI into current offerings.
AI mania could be grouped into three segments or eras:
ChatGPT chatbot comes on the scene. Late 2022. Several factors came together to produce something of an ideal storm including post-pandemic desire for something new and big (with growth in mind). Internal power struggles at OpenAI contributed to the mania by taking over the news cycle. The turmoil was partly driven by the growing fascination that was flowing to ChatGPT.
AI-related capex boom (the NVIDIA surge). 2023-2024. Every Big Tech company except Apple experienced a rethink of their capital expenditures trajectory with AI-driven data centers, cloud infrastructure, and related assets in mind.
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AI Event Optics Tell a Story
In some ways, OpenAI and Google are polar opposites.
Last week, the 2024 spring cycle of tech events kicked off in earnest. OpenAI livestreamed a “Spring Update” event, and Google held its annual developer conference. As expected, some of my AI fears, which we discussed in last week’s essay, came to fruition. Another thing that jumped out at me was the juxtaposition found with the two AI-infused events. A closer look at event optics provides a story underlying AI mania.
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AI Mania Is in Full Swing
It’s been intriguing to watch Wall Street and Silicon Valley become enamored by AI. Seemingly every week, we are met with the latest and greatest advancements made possible by AI models. ChatGPT may need to pass the baton over to Sora in terms of capturing hearts and minds. While all may seem well, AI mania is hiding a growing problem involving technology once again outpacing design.
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Sam Altman Mania
Earlier this month, the tech news cycle was overtaken by the attempted board coup at OpenAI. The drama played out on X seemingly minute by minute. After a few days, it became clear the board’s effort ultimately would fall short. At a certain level, many people loved the twists and turns, as if we have been starved of such drama in tech. I guess the Elon Musk drama became a bit tired. Other people thought the OpenAI saga was a riveting inflection point in the AI movement. The company must have achieved such a breakthrough that members of the board were downright frightened by the ramifications. I think all of that will end up being wrong. Instead, we were witness to the Sam Altman show – days of unnecessary drama ultimately initiated by Altman’s behavior and amplified by his masterful command over the startup tech press.
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The Future of Search
The recent chatbot craze fueled by ChatGPT, which needs a good dose of cold water thrown on it, has led to renewed talk of search’s future. Microsoft’s investment in OpenAI led some to conclude that Google should be nervous. The thinking goes that the combination of Bing and massive language models will impact Google’s search dominance. I find such thinking rudimentary at best.
Much of the chatbot craze will fizzle out. We are still in the buzz part of the current curve. It would not be surprising if the fizzle burns out quicker than people are expecting.
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Throwing Cold Water on ChatGPT
The late 2010s was witness to one the largest head fakes in consumer technology: voice-first or voice only interfaces. Tech pundits and analysts fumbled over themselves with projections that we would converse with speakers positioned around the house instead of looking at screens. Such an idea even permeated through several tech giants including Amazon and Google.
Scott Galloway, who gained a following in tech circles for his bold predictions, said in 2018 that a third of computing will be done on devices without a screen in 2020, with two thirds of that processed by Alexa. Of course, Galloway was wrong.
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