AI Hype Cycle Harming Business Focus

The boom in consumer artificial intelligence apps, led by the buzz around OpenAI’s ChatGPT and DALL-E, has provided CEOs with the perfect get out of jail free card for any shareholder meeting. According to CNBC, the number of mentions of artificial intelligence skyrocketed in the first quarter of 2023, with even non-tech companies getting involved for a little bump in their stock price. 

But outside of a few pursuits, mostly coming from the major technology companies such as Google, Meta, and Microsoft, the announcements of new AI integrations and projects are far less sophisticated than they are being made out to be, if not altogether fabrications. 

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The issue facing the industry at large is the generalization of the term AI, which has bled into the wider media landscape. Especially with the current fascination with AI that can create human-like essays, emails, and images, lumping a predictive analytics platform in with these newer forms of AI could be considered disingenuous to stakeholders and obfuscate what service the company actually provides. 

“Here’s the problem: Most people conceive of ML as ‘AI’. This is a reasonable misunderstanding,” said Eric Siegel, founder of the Machine Learning Week conference. “But ‘AI’ suffers from an unrelenting, incurable case of vagueness — it is a catch-all term of art that does not consistently refer to any particular method or value proposition. Calling ML tools ‘AI’ oversells what most ML business deployments actually do. In fact, you couldn’t overpromise more than you do when you call something ‘AI.’”

There is also the issue of many businesses adding unnecessary generative AI tools to their apps or services, many of which are integrations with OpenAI’s ChatGPT. Chegg, Coca Cola, Duolingo, Expedia, Slack, and Snapchat all announced generative tools in collaboration with ChatGPT, and have posited that the next few years will be focused on improving in the field of AI. 

This may not be that much of an investment, if ChatGPT is the one doing most of the legwork. However, it begs the question what these organizations intend to do if OpenAI raises prices for its API drastically, which could definitely happen if the company loses the beneficial agreement it has with Microsoft to use its Azure cloud servers. If generative chatbot systems lead to increased user engagement, it may force these companies to work on their own AI efforts as a failsafe to ChatGPT. 

Generative AI definitely has use cases, but there is a worry that as this technology is so new, we could see a situation similar to the automotive industry in the mid-2010s, when almost every manufacturer announced they were working on a self-driving vehicle and projected it to be ready for the new decade. In 2023, most of these efforts have fizzled out, with a handful of self-driving operators and large automotive manufacturers still in the game.