I’ve wondered how best to understand AI. No, not the actual tech; AI is still just recursive computer programs and glorified search engines. I’m interested in the social fallout of AI marketing hype, the future of AI and the impending collapse of the whole venture capital scheme.
Companies adopting AI initiatives have found that those initiatives are losing money. Not just some are failing— 95% of those initiatives are failing. The corporations creating and selling AI models and gizmos don’t have a profitable business model. They aren’t profitable, and almost all of those AI start-ups will soon be bankrupt.
But, these are tech bros. Facts and real-world problems are just distractions from their vibe coding and chest pounding. We lesser humans just need to stand aside and let them rule the world; they’re so much smarter than we are, you know.
The loop of incestuous investing among Big Tech corporations will prop up the industry for a while longer, but not for long. People talk about the “AI bubble” in the stock market, but the true damage will be to businesses and the larger society because when the house of cards collapses, many billions of dollars will have been sucked out of the economy and into the accounts of a few tech bros.
No amount of gesticulating while wearing a black leather jacket will stop the coming collapse. Unlike Macbeth, the AI tech bros won’t kill everyone who they fear. Like Macbeth, their hubris will led them to their doom.
The Future of AI – A Crash? Or a Whimper?
Let’s get back to my original question of how to understand the AI hype. What is a good analogy for all this nonsense? On one of my evening walks around Prague, the answer appeared before me.
All of the breathless hype about AI revolutionizing the way we live and work will sound familiar to anyone who was around 25 years ago. It’s really the same story now on artificial stimulants.
In 2001, the two letters drawing all the hype weren’t “AI” but “IT.” Not “information technology,” simply, IT, the indirect object. This IT, said its inventor, was a tech device that was going to change the world. It would revolutionize our lives, change the way we travel, cause cities to be redesigned and rebuilt.
Dan Kois described it best.
In January of 2001, a startup news website broke a huge technology story: A charismatic millionaire was secretly developing an incredible invention, one that would change the world, in his lab in New Hampshire. The news came via a leaked, secret book proposal, which had just sold to the academic publisher Harvard Business School Press for $250,000. Within hours, the story was everywhere.
The proposal quoted Steve Jobs saying the invention would be “as significant as the personal computer.” Jeff Bezos said it was “revolutionary.” But what was surprising about the book deal wasn’t merely the praise the invention and its inventor, Dean Kamen, garnered from tech world luminaries. It wasn’t merely the substantial investment the inventor had received from famed venture capitalist John Doerr, the largest in the firm Kleiner Perkins’ history. What stood out most of all was the detail that Harvard was paying a quarter-million dollars for the book — and it didn’t even know what the invention was. The inventor was paranoid about leaks, and the book’s author withheld that information from the proposal. No one — not even the literary agent who had submitted the proposal to editors, swearing them to secrecy — knew what the invention was. All they knew was the single word of the book’s title: IT. (Source: Dan Kois)
If that doesn’t sound eerily familiar to you, you … well, seriously, pay attention.
IT was the Segway Personal Transporter. It was a two-wheeled battery-powered scooter of sorts. You stood on it and it would creep forward. It’s inventor said it was going to replace the automobile. It didn’t.
IT was all hype. The Segway generated more jokes than sales. Only 140,000 units were sold over the 20 years the corporation tried to sell the contraption (production ended in 2020). Aside from some mall cops and a smattering of tour companies in tourist hot spots, no one bought the silly thing that no one needed. No cities were redesigned to accommodate the Segway. There have been no reports of lives changed by the invention.
Eventually, the Segway brand was bought by a Chinese corporation that now manufactures electric kick scooters — the devices being banned in cities around the world because they’re dangerous projectiles wielded mainly by a few bros trying to prove their manhood. A store selling these soon-to-be-banned-in-Prague devices is what I ran across that night.
Looking at the scooter in the window, I wondered if I was seeing the future of AI in a decade or so. Once the hype has faded, once the venture capital has been lost and the corporations have failed, there will be a few “AI” products left, sitting on a proverbial shelf, hoping someone other than a few bros trying to prove their manhood will somehow still care.
I believe you are incorrect in looking at AI as a fad. It is revolutionary in a way we haven’t seen in out lifetime. It would be akin to people first seeing the steam engine and being able to extrapolate to airplanes being in the sky in 100 years.
We have no idea where AI is going. Most of us won’t live long enough to have enough time to develop the proper perspective on it.
But it will change life – bluntly or subtly – in almost every way, going forward. It is difficult to see where it WON’T be. It is scary because it is hard to detect and is eerily humanlike.
AI is worse than a fad; it’s a scam. The technology will be another Segway, but the economic damage of the AI bubble bursting will be far worse.