Is generative AI worth the hype?

Generative Artificial Intelligence (AI) has evolved rapidly, transforming industries, workflows, and human-computer interactions. At the heart of this revolution are Large Language Models (LLMs), which leverage vast amounts of data to generate human-like text, understand context, and perform complex tasks. This article explores the idea if generative AI is worth all the hype?

Generative AI offers unprecedented opportunities to automate routine and complex tasks. From drafting emails to generating software code, LLMs can significantly reduce time and effort, allowing people to focus on more complex tasks . This can lead to enhanced productivity and cost savings. AI can generate personalized content at scale, increasing engagement and reducing content creation time. However, in-spite of these applications of generative AI, it is still very limited in the benefits that it offers to corporations and consumers. There are concerns regarding hallucinations, misinformation, and biases with generative AI that has resulted in a slower adoption of LLMs than expected.

Recently, OpenAI which created ChatGPT, was valued at over $150 Billion. OpenAI has an annualized revenue of around $3.5 Billion which makes the valuation 43 times revenue. A 43x revenue multiple is unheard of in the financial world and defies all valuation models. Over the past 2 decades, technology companies such as Amazon, Apple, Alphabet etc. have grown exponentially and are among the largest Fortune 500 companies globally. I witnessed this firsthand as an employee at Google from 2011 to 2019. One could argue that they have grown far beyond anyone's expectations and challenged all valuation models. So is history going to repeat itself with the AI revolution?

The verdict to that question is not out yet and it is almost impossible to predict the future. Generative AI and Large Language Models represent a significant leap forward in the capabilities of artificial intelligence. They offer tremendous opportunities across various domains, from automating mundane tasks to enhancing creativity and innovation. However, these advancements come with substantial challenges. Navigating these challenges will require collaboration between private corporations, researchers, policymakers, and global leaders to ensure that the benefits of generative AI are realized while minimizing potential risks.

We know that disruptive technologies capture the imagination of people but it is uncertain that generative AI is going to live up-to its promise in the near future. It might take longer than expected for corporations and consumers to realize the benefits of generative AI and it might be wiser to make investments in the technology accordingly. Over-investing in generative AI can be a risky strategy for corporations and can impact their financial health in the long-term. As the field continues to evolve, the focus must remain on developing AI systems that are not only powerful but also safe and sustainable.