Re: AI heatwave

I’m trying to make sense of “The AI summer” [1].

OpenAI’s ChatGPT had a meteoric rise in popularity not because the technology works (it does, for some reasonable definition of “works”) but rather the foundation is there for viral spread because:

> a lot of this is ‘standing on the shoulders of giants’ - OpenAI didn’t have to wait for people to buy devices or for telcos to build DSL or 3G

> ChatGPT is just a website or an app, and … it could ride on all of the infrastructure we’ve built over the last 25 years. So a huge number of people went off to try it last year.

But current AI’s problem is that no one knows what to do with it:

> The problem is that most of them haven’t been back. … most people played with it once or twice, or go back only every couple of weeks

> On one hand, getting a quarter to a third of the developed world’s population to try a new product in 18 months is very hard. But on the other, most people who tried it didn’t see how it was useful.

Current AI is more R&D than basic foundational research but it is still more R than D, and it’s still far from being COTS [3] products:

> Accenture … Last summer it proudly announced that it had already done $300m of ‘generative AI’ work for clients… and that it had done 300 projects. Even an LLM can divide 300 by 300 - that’s a lot of pilots, not deployment.

> As a lot of people have now pointed out, all of that adds up to a stupefyingly large amount of capex (and a lot of other investment too) being pulled forward for a technology that’s mostly still only in the experimental budgets.

> an LLM by itself is not a product - it’s a technology that can enable a tool or a feature, and it needs to be unbundled or rebundled into new framings, UX and tools to be become useful. That takes even more time.

It took 8 years (to approx. June 2022) for cloud adoption to touch 25%. It took that long for cloud adoption expected-in-3-years to just pass 40% [2].

It took 2 more years and a pandemic (to approx. January 2024) for cloud adoption to get to about 30%. It took that long for cloud adoption expected-in-3-years to get near 50%:

> If you work in tech, cloud is old and boring and done, but it’s still only a third or so of enterprise workflows

> it took more than 20 years for 20% of US retail to move online

Gen AI and LLMs are here to stay but it’ll still take many years to decades for it to spread everywhere and displace existing technologies and labor.

[1]: https://www.ben-evans.com/benedictevans/2024/7/9/the-ai-summer

[2]: https://www.ben-evans.com/benedictevans/2023/7/2/working-with-ai

[3]: https://en.wikipedia.org/wiki/Commercial_off-the-shelf