Navigating AI: Bubbles, chats and more.

August 16, 2024

Welcome to this week’s AI Trailblazers Newsletter and thank you for making us your go-to source for the business of AI.

As summer winds down in mid-August, discussions around AI are heating up, particularly the debate on whether we’re in an AI investment bubble. While we're seeing more success stories from companies implementing AI, progress has not kept pace with the high expectations of quick returns. This week, a more concerning issue has emerged: OpenAI is raising alarms about users forming relationships with ChatGPT through its voice mode. Discover more below.

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AI for the People

Despite the growing investment in AI advertising, consumers remain skeptical and wary of the technology's impact. Business Insider delves into the research that shows that ads emphasizing AI often fail to resonate, as many people are concerned about AI replacing human creativity. Successful AI ads focus on enhancing human experiences, highlighting the need for a balanced approach in marketing AI-driven products.

  • Consumer Skepticism Towards AI Ads: Despite companies investing over $40 billion in generative AI this year, consumers remain wary, with 52% expressing concern over excitement about the technology. High-profile AI ads, such as Google's "Dear Sydney" during the Olympics, have faced backlash for being tone-deaf, highlighting a disconnect between advertisers' enthusiasm for AI and consumer apprehension.

  • Impact of AI on Purchasing Decisions: Research shows that consumers are less likely to buy products labeled as "AI-powered," especially in sectors like electronics, medical devices, and financial services. Concerns about AI potentially replacing jobs and undermining human creativity contribute to this distrust. As a result, AI-focused ads often fail to resonate with audiences, leading to mixed reviews and criticism.

  • Investment in AI Marketing: Despite consumer hesitation, companies continue to pour millions into AI marketing, with ad spending on AI products increasing significantly in 2024. However, experts advise that marketing should focus on how AI enhances the human experience rather than overly emphasizing the technology itself. Successful AI marketing should prioritize the benefits and outcomes for consumers, not just the novelty of AI.

  • Human-Led Narratives in AI Ads: Ads that successfully integrate AI often feature human-led narratives, showing AI as a tool that supports rather than replaces human creativity. Examples include Adobe's birthday card ad and Dove's "The Code" ad, both of which performed well by emphasizing how AI complements human efforts. In contrast, ads that focus too heavily on AI's capabilities, like Microsoft's Olympics ad, tend to perform poorly with consumers.

AI Trailblazer Takeaways: People will choose how much AI they use in their lives, resisting forced adoption. Like with microwave ovens, initial skepticism about AI may fade as benefits become clear. Revolutionary technologies take time to gain acceptance - this is a reality we must recognize.

An AI Expectations Bubble

The debate over whether AI is a bubble centers on concerns about massive investments without immediate, tangible returns. While some industries are gradually adopting AI, its full impact is still unfolding, with small, incremental successes leading the way. Daniel Newman of Forbes explores the varying timelines for AI adoption, the potential for significant growth, and why the technology's true value may soon become more apparent.

  • Debate on the AI Bubble: The idea of AI being a bubble stems from concerns about massive investments in AI infrastructure without clear, immediate demand. Critics argue that the hype around AI is overblown, but the impact of AI may vary significantly across different industries over time. The timeline for AI adoption and value realization is crucial in assessing whether AI is truly a bubble.

  • Gradual Adoption and Industry-Specific Impact: AI is gradually being integrated into various industries like banking, healthcare, and manufacturing, showing significant growth in applications like object detection and conversational AI. While the current impact might seem limited, there is steady growth in proof of concepts (POCs) and use cases, suggesting that AI's influence will expand over time. The pace of adoption will differ across industries, leading to varying timelines for realizing AI's full potential.

  • AI Network Effects and Economic Impact: AI's influence is primarily seen in the initial stages of infrastructure buildout and software development, with gradual adoption in specific industries. The economic impact of AI is growing, especially as enterprises implement AI to stay competitive. The complexity and expense of AI infrastructure are challenges, but small, incremental wins are driving continuous progress.

  • No Immediate AI Bubble, but Growing Potential: While there may not be a significant AI bubble, the lack of immediate large-scale wins makes it difficult for investors to fully gauge AI's economic impact. However, with increasing adoption and integration, AI's value is expected to become more apparent in the next 18 months. The current phase of AI development is characterized by steady progress that will eventually lead to widespread adoption and impact.

AI Trailblazer Takeaways: AI wins are emerging but the shear size of the dollars invested are driving doubt about returns and taking all of the media oxygen. Remember, Rome wasn’t built in a day.

Don’t Actually Chat with ChatGPT

OpenAI's new ChatGPT voice mode, which mimics human-like conversation, has raised concerns about users becoming emotionally dependent on the AI. CNN reports that as the tool gains popularity, experts worry about the potential impact on human relationships and social norms. This summary explores the ethical challenges, trust issues, and unintended consequences of this advanced AI feature.

  • Concerns Over Emotional Dependence: OpenAI has expressed concerns that users may become emotionally reliant on ChatGPT's new voice mode, which sounds remarkably human. The tool's ability to mimic human-like responses, including adjusting to interruptions and detecting emotional tones, has raised fears of users forming deep emotional bonds with the AI. This could lead to reduced human interaction and over-reliance on AI for companionship.

  • Potential Risks of Trust and Social Impact: The lifelike voice of ChatGPT might cause users to trust the AI more than they should, especially given its potential for errors. OpenAI's report highlights the broader risk of AI tools being rolled out before fully understanding their social implications. The ease with which users might trust AI could affect the way people interact with technology and each other.

  • Unintended Consequences and Ethical Challenges: As AI tools like ChatGPT's voice mode are rapidly deployed, users are finding new, sometimes unintended ways to engage with them, such as forming romantic relationships with chatbots. This raises ethical concerns about the responsibility of tech companies to navigate these developments carefully. Experts worry that deep connections formed with AI might not be sustainable or healthy in the long term.

  • Influence on Social Norms: OpenAI also noted that user interactions with ChatGPT's voice mode could alter what is considered normal in social interactions. For instance, the AI's deference to interruptions might be expected in AI interactions but is considered rude in human conversations. Over time, such interactions could subtly shift societal expectations and norms in communication.

AI Trailblazer Takeaways: People interacting with AI like they were human, sounds like a movie! As Gen AI technology gets better this will more than likely become an important issue we will need to tackle. Glad to see Open AI on the right side of this issue.

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Quote of the Week

“My mother lived until she was 90 and I learned from her if you want to survive in this world, you have to adjust to the change otherwise you are left behind.”

- Ruth Schneiderman, 77 - an AI student