Are We Heading Into An AI Bubble?

Hey everyone,

Welcome back to "Nothing Artificial About It."

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This week, I've been wrestling with a question that many are asking: Are we heading into an AI bubble?

I came across two pieces that really got me thinking. First, an article in The Economist pointed out that investor excitement for AI might be cooling off. Some leading AI companies have seen their stock prices drop by 15% since their peak last month. Only about 4.8% of American companies are currently using AI in their products or services, which is actually down from earlier this year.

Then there's a report from Goldman Sachs titled "Gen AI: Too Much Spend, Too Little Benefit?"

Jim Covello, the Head of Global Equity Research at Goldman Sachs, sounds the alarm on what he sees as unsustainable spending in the AI sector. He says we're looking at over $1 trillion poured into AI infrastructure and development in the next few years. That's a staggering amount, and Jim is skeptical about whether this investment will yield adequate returns.

He points out that AI technology is too pricey to develop and operate. For companies to see a meaningful return on this investment, AI must solve highly complex problems-something he argues it isn't currently capable of and perhaps never will be. Jim draws parallels to past tech hypes like the metaverse and blockchain, which saw massive investments but have yet to deliver transformative value.

But here's where things get interesting. Enter entrepreneurial optimism.

Despite this skepticism, the entrepreneurial spirit around AI refuses to slow down. Just look at Mukesh Bansal, a veteran entrepreneur who recently launched Nurix.ai and secured $27 million in funding. Mukesh is no stranger to building successful ventures, and his leap into AI signals a strong belief in its potential.

This brings me to a broader observation: we might be on the cusp of a new wave of Indian AI startups ready to go global, much like the SaaS boom we witnessed a few years ago. These startups are not just riding a hype train; they aim to solve real-world problems and bring tangible value to businesses and consumers alike.

So, where does this leave us? On the one hand, we have warnings of an AI bubble fueled by excessive spending with questionable returns. On the other, we see relentless optimism from entrepreneurs and investors betting big on AI's future.

The truth lies somewhere in between. Yes, there may be overexuberance, but dismissing AI's transformative potential could mean missing out on significant innovations.

I'm curious to hear your thoughts as we navigate this complex landscape.

Do you believe we're in an AI bubble? Or do you think this is just the beginning of AI's true potential being realized?

Indians in AI: Rohit Prasad Leading Amazon's AI Revolution

Meet Rohit Prasad, the Indian tech genius behind Amazon's big AI push. If you've ever chatted with Alexa, you've experienced his work firsthand. He's the guy who transformed voice interaction for millions.

Growing up in India, Rohit was captivated by Star Trek and its talking computers. He studied at BIT Mesra in Ranchi before pursuing advanced degrees in electrical engineering and computer science.

He played a crucial role in developing Alexa's speech recognition at Amazon. However, the landscape shifted with the rise of AI models like OpenAI's ChatGPT. According to The Wall Street Journal, Rohit is now spearheading Amazon's efforts to catch up. He's leading teams working on new AI models like Titan and Olympus, aiming to make Alexa smarter and weave AI into everything Amazon does - from smart-home devices to cloud computing.

Despite Amazon's strong history in AI, the company has been lagging behind competitors in the generative AI space. But with Rohit at the helm and CEO Andy Jassy backing him, there's a big push to turn things around.

Rohit's journey from a curious kid in India to a global leader in AI highlights the significant role Indians play in shaping technology's future.

AI in Action: Bare Craft - Empowering Artisans with AI

Meet Himanshi Singh, who witnessed something heartbreaking a few years ago. Kamla, a master artisan with 25 years of leatherwork experience, was forced to walk barefoot back to her village during the pandemic. She had lost her livelihood overnight - no income, no support, no future.

This shook Himanshi to her core. "If someone like Kamla can lose everything, what chance do others have?" she wondered.

Determined to make a difference, Himanshi founded Bare Craft, a platform that uses AI to breathe new life into traditional artisanship. "Our AI matches the right artisans with the right projects while optimizing raw materials and logistics," she explains.

It might sound surprising - AI and traditional crafts - but it's working wonders. The platform's algorithm connects buyers with the perfect artisan community based on craft type and location. "It's not just a catalog," Himanshi says. "AI helps us recommend raw materials, cuts down production time, ensures fair pay for artisans, and minimizes costs for buyers."

One of their early successes was a designer dress that combined block printing, chikankari embroidery, and kantha work-three distinct crafts from different cities. The final product directly supported six artisans. And they're not stopping at fashion. Bare Craft is helping turn waste into treasure, like converting hosiery waste into sustainable cotton stationery.

Today, over 5,500 verified artisans are part of Bare Craft, each carrying a rich legacy of crafts like block printing, Chikankari, and Kantha work.

"We wanted to solve problems like transparency in supply chains, fair wages, and sustainable production," Himanshi says.

Looking ahead, Bare Craft plans to introduce digital passports for products, allowing buyers to see the entire journey of their purchase-from raw material to finished product. "This isn't just about selling crafts," she emphasizes. "It's about making people understand the impact of their purchase."

Opinion: Should We Be Worried About Unemployable Human Bots?

Please find time to read a thought-provoking piece by @Umakant Soni, chairman of AIfoundry and co-founder of ARTPARK. He draws a fascinating parallel between today's AI race and the Cold War's nuclear arms race. Just as that era spurred technological leaps like the internet and GPS, the current geopolitical competition in AI could lead to monumental advancements-or unintended consequences.

News and trends

1. "In the next couple of decades, we will be able to do things that would have seemed like magic to our grandparents." Sam Altman, in his latest essay, The Intelligence Age.
2. Google Will Fund Global AI Education At The Cost Of 120M Dollars: Sundar Pichai announced the "Global AI Opportunity Fund" at the event and said that the AI education will be done in local languages in partnerships with nonprofits and NGOs.
3. With AI, Dead Celebrities Are Working Again And Making Millions: The dead-celebrity industry has proved lucrative. Despite Michael Jackson being about $500 million in debt at the time of his death, his estate has amassed a fortune of $2 billion, according to People.
4. Microsoft AI Needs So Much Power It's Tapping Site of US Nuclear Meltdown
5. Open AI Pushes For Non-English AI Systems, Hindi and Bengali Included

Thanks again for reading and subscribing to this newsletter. Please write to me if you want us to spotlight an important AI story, profile an Indian doing significant research, or use AI to change how we live and work.

(Pankaj Mishra is the AI Editor at NDTV. He shapes stories and conversations that help explain AI in India and how it influences people's lives and work)