Newsletter #5: How do you ride the AI crescendo, tsunami wave? Where is Laird Hamilton when you need him... ;)

Reid Hoffman was recently interviewed on This Week in Startups by Jason Calacanis and his description of how he thinks about Generative AI was so spot on:

“I think it’s the crescendo moment, like when I say this is bigger than the Internet, bigger than mobile, bigger than cloud is because it’s building on all of them.?

“It’s the tsunami that you’re surfing at the top of it…But it’s really that this kind of scale compute, discovering things that we had never gotten anything even close to before and the way it’s kind of a human amplification is, you know, just kind of super interesting.”?

“But it’s like, oh my gosh, now there’s superpowers, like I have superpowers…Anyway, so it’s the most significant moment of technology in our lives so far, and maybe in our lives in the whole story.” (link)

The parallel to surfing makes sense because everything that came before this is now coming together to stand up a monster 10-20 year wave that we all need to figure out how to ride.

As individuals, as teams and as companies, this wave enables human amplification that can be hard to comprehend.

Superpowers to be understood and harnessed by all.

It’s difficult not to simply agree with Reid Hoffman when he says something like that given his track record, previous role with OpenAI , his departure from OpenAI to launch Inflection AI etc. but my hope with newsletter #5 is to support those statements with some data and get a bit more specific than I have in #1-#4.?

Connecting the dots to some of the leaders doing the work, putting the points on the board etc.

Here we go.

1: BofA Thematic Investment Report: AI Primer - "Me, Myself + AI" (link)

美国银行 published a 20-page AI primer - “Me, Myself + AI” - that touched on a number of macro and micro AI topics that make it well worth reading.?

What I enjoyed most about the primer is connecting the research and data to actionable themes I’m seeing within corporate Centers of Excellence focused on operationalizing Generative AI.

1: Data - quality, quantity, commoditized vs differentiated, proprietary, systems, actionable intelligence etc.

“If data is the new oil, then AI is the new electricity.”

“More data is created per hour today than in an entire year just two decades ago, and global data is expected to double every 2 years.”

“We are entering the age of the Yottabyte, but still, only 1% of global data is being captured, stored and used. This is about to change.”?

“We are at a defining moment – like the internet in the ‘90s – where Artificial Intelligence (AI) is moving towards mass adoption, with large language models like ChatGPT finally enabling us to fully capitalize on the data revolution.”

“By the time you finish reading this sentence, 231mn emails and 6bn searches on Google and 69mn WhatsApp messages will have been sent and 500 hours of video will have been uploaded on YouTube.”

“We will generate more data in the next 2 days than all the data created between the dawn of humanity and 2000... and 90% of global data was created in the last 2 years. And data creation is doubling every 2 years.”

“Each person will generate enough health data in their lifetime to fill 300mn books, or to fill the NY public library 6x. If you burned all the data created in just one day onto DVDs, you could stack them on top of each other and reach the moon – twice.”?

“More data is created every hour today than in an entire year just 20 years ago.”

2: Democratization + Pace of Adoption - access to data, experience with LLMs not requiring any technical skill sets etc.

“Large language model (LLM) based chatbots like ChatGPT democratize data and make it accessible to all without the need for training or experience. Thus, mass adoption is unprecedented.”?

“It took ChatGPT just 5 days to reach 1 million users, 1 billion cumulative visits in 3 months and an adoption rate which is 3x TikTok’s and 10x Instagram’s. The technology is developing exponentially.”?

“In the last decade, computing power to train the AI datasets doubled every 3 months, outpacing Moore’s Law by a factor of 6x. In the past 4 years the number of parameters for large language models grew 1,900x. And within a decade, AI models could be 1 million times more powerful than ChatGPT today.”?

“Global AI market is expected to grow at 19% CAGR to reach US $900bn by 2026E.”

3: Horizontal Impact of AI Across Industries - including Financial Services, Media + Entertainment

“Media - LLMs can be used for content generation e.g., writing news articles, social media posts, marketing content, story-writing, summarising text, media planning and advertising.”

“Music - AI and LLMs can be used to transpose music, generate melodies, chord progressions and lyrics. It can even analyse music and generate reviews and comparisons.”?

“Banks - AI can help analyse the data that banks, diversified financials and insurance companies have to conduct predictive analysis. AI could analyse an individual's credit history and calculate the likelihood of default. These companies can also retain customers for longer by providing additional services based on their spending and financial activities.”

“Fintech - AI can help fintech companies automate the credit risk assessment process, detect bank fraud, increase safety, automate the customer service experience and analyse user behaviour.”?

4: Personalization driving growth flywheel powered by resulting proprietary, customer data set and GAI system

“Product personalisation: AI can enable more efficient discovery of consumer preferences by gathering more data and analysing it. Increased product personalisation can increase the marginal utility of consumption for a given product and increase the variety of products available for consumers.”

“In the future, we believe there will likely be an increasing premium for jobs within occupational groups that require social intelligence, creativity and complex problem solving as opposed to repetitive, low dexterity skills.”

“It is important to bear in mind that AI and machine learning are enabling technologies. AI must be coupled with something to be useful. Hence, whilst these advanced language models could be disruptive to these sectors in terms of replacing jobs that involve relatively routine tasks, jobs in these sectors will not disappear altogether. They are likely to incorporate AI, allowing for greater productivity potential.”

5: AI adoption rates and their relationship with different generations

“In the case of ChatGPT and Bard, younger generations are more aware of them and see them in a more favourable light: 18% of Gen Zs know of them compared to only 6% of Boomers. Similarly, 15% of Gen Zs have a positive opinion about them compared to only 4% of Boomers.”

“44% of UK adults do not properly understand how AI works...but 51% of Europeans would like to replace their politicians with AI...and 49% of people prefer interactions with AI based chatbots, rather than other humans.”?

2: “Meet the 12 execs leading the AI strategy at top US banks like 高盛 , 摩根大通 , and 摩根士丹利 ” by Bianca Chan of Business Insider (link)

Big fan of lists and key takeaways. Something Insider has always been great at.

No surprise that the Financial Services leaders publishing quality investor research around macro / micro Generative AI insights and ideas are the same folks who are operationalizing it by making it real within their day-to-day workflows.

Working with a constraint of 12 executives is tough, but there are definitely some others I would have thought I’d see on the Insider list but then again, maybe that’s why I enjoy lists and debating who should be on them… ;)

1: “Of the nation's six largest banks, no two firms have the same AI leadership structure.”

“Most bank leaders agree that generative AI and LLMs stand to shake-up the current banking landscape — a few would even argue that it's revolutionary. But what banks can't seem to agree on is the best way to deploy AI throughout the organization."

"Of the nation's six largest banks, no two firms have the same AI leadership structure."

"Some have embedded AI experts into different lines of business, others use a centralized function to oversee AI efforts firmwide, and some opt for a mix of both. Banks' priorities and tech strategies can also be gleaned from which divisions have dedicated AI leaders and which don't.”??

2: Citi’s approach to an AI COE coupled with its Innovation Labs group

“All of that interest is funneled through 花旗 's AI center of excellence, which is run by Sharma. Sharma reports into Nimrod Barak , head of Citi's Innovation Labs where much of the bank's emerging technology research and experimentation takes place."

"The purpose of the center of excellence is to ensure there are best practices in place for using AI and machine learning, from governance to risk and tech infrastructure and tooling."

"Every sector and function of the bank is represented via AI and ML experts who meet on a regular basis to debate everything AI/ML, from which projects to greenlight to firmwide minimum requirements.”?

3: Goldman’s approach is “mindful of keeping humans in the loop, with the AI acting as a co-pilot.”

"We are seeing serious momentum within Goldman Sachs and potential use cases are pouring in. We are in the process of prioritizing which use cases we implement first. We've launched several proof of concepts," Gupta told Insider.”

“One promising use case has been around making software developers more productive, and streamlining and automating away some of the manual work involved in document-heavy operational processes.”?

"Within Goldman Sachs, if you look at it, we actually get millions of documents every month. To take those documents and apply generative technologies to extract both information from them as well as classify them is an amazing opportunity for us to automate things," Gupta said.”?

“All of the bank's AI projects are mindful of keeping humans in the loop, with the AI acting as a co-pilot, he added.”

3: 4 Other Notable Examples of Generative AI being Embraced by Industry

1: Coke (link)

“Digital creatives around the world can use a first-of-its-kind AI platform to generate original artwork with iconic creative assets from the 可口可乐公司 archives. Built exclusively for Coca-Cola by OpenAI and 贝恩公司 , “Create Real Magic” is the first platform of its kind to combine the capabilities of GPT-4, which produces human-like text from search engine queries, and DALL-E, which produces images based on text.”

“It’s an experiment to see where co-creation can take us,” Pratik Thakar said. “We’re moving at the speed of culture with an innovative program that’s very tangible for the creative community. ‘Create Real Magic’ gives digital artists the unique opportunity to play in a custom-created sandbox, powered by GPT-4 and DALL-E, and democratizes both our brand iconography and highest-profile advertising assets.” ?

“We are excited to unleash the next generation of creativity offered by this rapidly emerging technology,” said James Quincey, Chairman and CEO of The Coca-Cola Company. “We see opportunities to enhance our marketing through cutting-edge AI, along with exploring ways to improve our business operations and capabilities.”

2: Walmart (link)

“The north star for 沃尔玛 when it comes to conversational AI, said Desirée Gosby , would be if Walmart could leverage ChatGPT-like experiences or models to anticipate what customers are looking for.

Gosby admitted that the idea is “borderline creepy,” so it would require Walmart to figure out how to implement the idea safely and responsibly.”?

“The idea is “if we know your son’s going off to camp this summer, and that he has allergies, we can add these allergy medicines to your cart,” she said. “Or here are the things we would recommend to prepare him for camp.”

“The company now has nearly two dozen different experiences using the platform for natural language understanding capabilities, including a chatbot that a million Walmart associates interact with for customer care.”

“We’ve had a platform that has allowed teams across Walmart to build conversational experiences for about five years,” Gosby told VentureBeat. “We focus on building a natural language understanding capability that is retail-specific.”?

“And generative AI’s multimodal potential — for both text and imagery — is a tantalizing prospect, Gosby said. “What’s exciting for me is asking how we can use all of these things together to really create a transformative experience. It’s the combination of these different modalities.”

3: Adobe (link)

“In the first month since Adobe 's Firefly beta launch, creators made it one of the company’s most successful betas ever and generated more than 70 million images with capabilities such as text-to-image, vector re-coloring and text effects, with more coming in the weeks ahead.”

“Adobe developed Firefly, a new family of creative generative AI models, with its AI ethics principles of accountability, responsibility and transparency, enabling Firefly models to be both creator-focused and safe for commercial use.”

"Generative AI has captured the world's attention and changed how we think about collaboration and productivity," said Sissie H. , Vice President and GM of Assistant and Bard at 谷歌 . "We're thrilled to partner with Adobe Firefly, giving our users the power to bring their creative ideas to life, quickly and easily – directly in Bard."

“Firefly is the most differentiated generative AI service that generates commercially viable, professional quality content, and is designed to be embedded directly into creators’ workflows both in Adobe’s own applications and now in Bard by Google. Firefly’s first model is trained on Adobe Stock images, openly licensed content and public domain content where copyright has expired.”?

“Enterprise businesses will be able to train Firefly with their own creative collateral in order to generate content in the company’s brand language. The integration of Firefly across Adobe Experience Cloud applications will allow marketing organizations to use Firefly to accelerate their content supply chain production.”

4: Google New MusicLM (link)

That's it for this week.

I hope this contributes to your Sunday reading.

Enjoy the rest of your Sunday and your week ahead!

Alec