Gen AI: Call the Safety Car out

In August 1848 gold was discovered in the California territory. Newly acquired by the United States following the Mexican-American war, the territory was sparsely populated by US nationals. This would change rapidly in the coming years. President James K. Polk’s annual address to the Congress in 1848 confirmed the rumors trickling in from the West of abundant gold in California. What followed was a mass migration of fortune seekers who braved difficult passages over land and sea.? This came to be known as “The California Gold Rush”.

Gold rush, money making and car racing somehow tend to give a high.

The Formula One World Championship has been one of the world's premier forms of motor car racing.? The safety car is an important part of a F1 race and can be seen if there is a crash or an incident on the track. The purpose of a safety car in F1 is to slow down the cars on the track until a situation is resolved, such as a car that needs to be retrieved or debris on the track.? The safety car can also be used during a formation lap of the race if there is wet weather to slow down the drivers and prevent an accident.? The safety car was officially introduced in 1993.?

Fast forward to 2024.

Anguilla is a tiny British island territory in the Caribbean.? It is bringing in tens of millions of dollars in revenue thanks to its ".ai" domain name.? Over the past year, skyrocketing interest in Gen AI has made Anguilla's ".ai" top-level domain (TLD) particularly attractive to tech companies. The revenue is a boon for Anguilla's economy, which primarily relies on tourism and has been impacted by the pandemic.? Internet domain Registrars must pay Anguilla a fixed price and the prices are rising due to demand.? Anguilla has no reason to complain about AI.

The frenzy around Gen AI - particularly the commercial interest in them, is a clear sign of a Gold Rush of our times. The Gen AI Gold Rush. ?

World over, there is a big rush to build data centers and compute capacity that allow Gen AI models (LLMs) to run. ?While tech firms are making huge spends in Gen AI, its visible use in businesses seem quite limited.? The recent announcement of one of the big tech players about retiring its GPT Builder and their stated focus on commercial and enterprise scenarios, is quite fresh.? It is also seen by many as a reflection of the lack of economic viability and increasing legal liabilities, in providing such services.?

While the bean counters are busy at tech firms - laughing their way to the bank, more lessons have emerged from this Gen AI frenzy.

1. The overemphasis on Gen AI sometimes is at the cost of ignoring proven (AI) techniques that may be more fit for purpose, for a specific use case.? The Gen AI linked revenues in the last few quarters reported by top tech firms is also an indicator of the frenzy.
2. The hype and rush surrounding Gen AI tends to cause force fitted solutions, resulting in very limited or no business use and value. This impacts adoption and increases the occurrence of project failures in businesses.
3. The rush for using Gen AI is tending to make organizations have no clear business strategy that is intertwined with AI.? Partner firms aren’t lending enough support to their customer organizations on this front.
4. Complicated pricing models, specifically with LLMs, even for the “experimentation phase” in a business. ?Needless to mention, the overall price to pay tends to be exorbitant for a user organization.
5. Complex cost and unit economics calculations that inhibit estimating the true costs and returns of Gen AI.? Clearly pointing to the need for a sustainable business model, be it B2B or B2C.

The above are telltale signs enough to bring the AI safety car out for some period on the racing track and “prevent crashes and accidents.”?

In F1 car racing, once the safety car is back at the pit lane, there will be ample time for racing, waving the chequered flag, and the winner spraying champagne at the podium.? Ditto with an AI program.