Reports say that recently, the tech giants of Silicon Valley seem to be having a hard time as investors mull over whether their investments will get them the profits they desire.
For over a month, the share prices of those companies have dropped by 15% as observers question the limitations of the language models.
Although big tech organizations have spent tens of billions of dollars on AI models, the latest data from the Census Bureau reveals that only 4.8% of American companies use AI to produce goods and services, which was 5.4% early this year.
Many technologists believe that it is going through the hype cycle proposed by Gartner, a research firm. The hype cycle states that new technology is first received with enthusiasm and overinvestment, and then it enters the period of disillusionment, where everyone starts to worry about the slow adoption and profit slump.
However, after the slump, it makes a comeback and results in a huge build-out of infrastructure and mainstream adoption. Trains and the internet are good examples of this cycle.
For trains, it all started with a fever when everyone plowed money into railway stocks, and then a crash followed. Later, the initial investments during the mania period helped build the track and eventually transformed the industry.
Although AI hasn’t seen the same scale of burst yet, it is believed that it is on the way to global dominance.
Noah Smith, an economics commentator, said, “The future of AI is just going to be like every other technology. There’ll be a giant, expensive build-out of infrastructure, followed by a huge bust when people realize they don’t really know how to use AI productively, followed by a slow revival as they figure it out.”
In conclusion, the hype cycle is rare, and out of all the technologies that go through despair, sis in ten never come back. There is a chance that AI might offer big benefits, but currently, the challenge is to find what it offers to the economy so it can have a breakthrough.
