Why AI bubble will burst, with Emmanuel Maggiori - HS#24

In episode 24, Miko Pawlikowski ??? sits down with Emmanuel Maggiori , an AI consultant, writer, and speaker who is on a mission to debunk much of the hype surrounding tech and AI.

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Behind Every Successful AI Project

Emmanuel Maggiori notes that for every successful AI project, there are about 20 that fail. Using the infamous startup Juicero as an example, Emmanuel emphasizes how the hype surrounding AI often overshadows its limitations. Juicero, which created an exorbitantly priced juice machine, is a testament to the dangers of tech hype.

The Realities of AI Hype and Failures

One aspect that Emmanuel draws attention to is the common oversight in the AI industry: AI's mistakes, or "hallucinations," are not quick fixes. Engineers are often distracted by the allure of solving non-existent problems while ignoring tangible issues. For instance, despite millions of dollars in investment and vast talent, industries like self-driving cars have not lived up to promises, leading to their decline.

The AI Bubble Will Burst

Miko brings up Emmanuel’s book, "Smart Until It's Dumb: Why Artificial Intelligence Keeps Making Big Mistakes and Why the AI Bubble Will Burst." Rather than sugarcoating AI’s potential, Emmanuel emphasizes the cyclical nature of tech hype, comparing the AI bubble to blockchain and other overhyped technologies. The fascination with creating machine intelligence often overshadows practical, user-friendly applications.

Human-Centric Innovation

A critical point that Emmanuel circles back to is the necessity of focusing on real customer needs, instead of developing technology for technology's sake. He uses the example of Amazon’s AI-based supermarkets, which aimed to eliminate checkout lines but ultimately failed technically and commercially. This tech-first approach led to a solution that nobody truly needed.

AI in Daily Lives

Despite the setbacks and hype, Emmanuel and Miko agree that AI has found meaningful applications in daily life. Applications with low stakes, like hotel review translations and e-commerce recommendations, have seen successful AI integrations. Furthermore, tools like ChatGPT have become valuable assistants, helping people with coding or improving their written English.

Pitfalls in Tech Investment

Addressing the darker sides of the industry, Emmanuel shares insights from his book "Siliconned," which delves into the pitfalls of tech investment driven by hype rather than substance. Low interest rates and the abundance of venture capital have led to misallocated resources, culminating in projects that add little value, exemplified by companies like Juicero and WeWork.

The Role of Cheap Money

Emmanuel expounds on how cheap money has led to a proliferation of startups and tech projects often lacking real value. He provides a detailed analysis of how economic policies, such as low interest rates and venture capital structures, contribute to this phenomenon. This influx of money has driven the incessant need to hype products and technologies, often resulting in companies that prioritize appearances over actual utility.

Looking to the Future

As the conversation draws to a close, Miko asks Emmanuel to put on his futurist hat. Emmanuel predicts that while AI will certainly become a tool we use increasingly in our daily lives, it’s unlikely to be as transformational as initial internet adoption. He foresees that many commercial AI applications will fall short of expectations due to persistent issues like hallucinations. However, he acknowledges the potential for cost optimizations that could make AI more accessible and efficient.

Conclusion

Episode 24 provides a realistic lens through which to view the promises and pitfalls of AI and tech innovation. Emmanuel Maggiori’s grounded insights serve as a reminder to temper our expectations and focus on real problems that need solving. For those interested in digging deeper, his books "Smart Until It's Dumb" and "Siliconned" are essential reads.

Stay tuned for more fascinating discussions on The HockeyStick podcast, where we continue to explore the fulcrum points of tech, business, and performance.