Today on the 5: There are many reports that the red hot AI hype cycle is finally coolng off to some degree. While the markets may not be happy about that, it might be the best thing to happen for the sector overall.
Ozone Nightmare
Positive Deflation
Welcome to daily five for Monday August 12th, 2024. I've seen a couple of different news reports showing that the the interest in the AI boom seems to be cooling off. Now different reports are showing a cratering, but I don't know whether I really trust those or not. But I've seen a number of them that certainly show that the momentum behind the space is slowing down, maybe plateauing, maybe it is dipping a bit, maybe it is cratering. I don't know this depends on how you define all these different analysis and how all these different analysts are doing their analysis. But in broad strokes, I have to say, I think this is actually a good thing, not the cratering part, and I don't really believe that the industry is in danger of a bubble bursting the way some people do. I do think that the height bubble is finally beginning to deflate, not necessarily popping, but is definitely coming back down to earth because now we're starting to see what the costs are likely to be for some of these things. I just saw a item I think over on in gadget, or maybe it was nine to five max saying the projected cost for Apple intelligence is going to be $20 a month, which I really can't imagine even Apple super fans paying AI people maybe, but $20 a month, boy, it better be really impressive and it better be more than just correcting your handwriting and doing fancy arithmetic. I mean, don't get me wrong. I'm sure those people exist, but I don't know that you have an entire market built around that, especially when the cost of almost everything else is also going up on a monthly subscription basis. But in any event, I do think that there is a benefit to some of the rabid interest in this space starting to evaporate at least a little bit. And that is because almost nothing is served by this kind of just over engineered level of attention. I mean, we've seen it time and time again that when things come and they get hot and they're really, really popular and everybody's talking about them, everybody's interested in them, and they aren't really fully formed yet, that is when they generally get into trouble. Either they don't ever live up to the promise that was initially thought that these products would have, and I think AI certainly has that problem. There is the realization of what the cost of the technology is going to be. Again, something I think AI is now starting to contend with. And just in general, there is the kind of stereotypical human tiredness of something that they don't ever hear an end to. And that does seem to be talking to actual people. People are already sick of hearing about AI because it isn't really something they understand yet. And it isn't really in most of the products that they're using. And frankly, they don't really see the utility of it. Not just talking about ordinary people, not people that are within the tech industry, not people that are in certain. I mean, it's going to be very useful as a background tool in many different industries. It is likely that within 10 years, almost anybody entering into the workforce will be using some form of an AI generated tool set without necessarily even knowing it or caring. It will simply be built in to whatever they use to do their job. I don't know that it's going to necessarily replace jobs, but it will augment jobs. It will be the whatever database thing that you feed, whatever information you need to into to get a better result or to get it analyzed or presented in a certain way. And so we're all going to have this stuff around us. But as far as people talking to their phones or computers or using chatbots or interacting in some of the ways that a lot of these ridiculous demos show us doing, I don't think that's ever going to come to pass. Because again, two big reasons. One, I don't think anybody really wants it. I don't really believe from what I have seen that there is enough to justify a market. I'm not saying nobody wants it anywhere ever, but you have to have enough people to constitute a market for something like that. And the other end of it is that it's going to take a while before these tools are truly trustworthy. Even if they're in a 90% correct range, that's still not going to be enough. Because just like any of these voice assistants, when you get annoyed at something not working properly just a couple of times, you become disinclined to use it. And that's why I think that maybe some of the cooling off of the attention on these tools will allow them to develop, will allow them to find the proper spaces and will let them actually become mature and hopefully useful to people. And in that way, even though I'm sure that market speculators and the people who are trying to sell their products with those letters in them and everything else, they don't want to see any of this hype die down. They want to keep it going because they're basically trying to make sales off it. But for anybody who actually wants to see the technology succeed in a real way, you don't want this type of thing. You want things to develop properly on their own timeline so they actually become useful. So while I'm sure the market may not be thrilled that possibly the AI bubble is starting to, and if not burst, deflate a bit. I think overall in the long run, it might be the best thing that could possibly happen in this space later.