The idea in 60 seconds :

  • Hype is excessive marketing which might include exaggerated claims.
  • The BenefitsOof Generative AI The most common claims I’ve seen are significant productivity improvements and disruption for existing industries.
  • Reality: What does the data say about those claims? Are they credible? There are some examples of a transformative effect but the evidence is not yet clear.
  • Conclusion: Consideration of the question, is Generative AI hyped? In my view the answer is a yes (yes, it is hyped) with a but….

Is Generative AI All Hype?

Hype is an intensive form of marketing – which sometimes includes potentially exaggerated claims about what a product might be able to do.

There is no shortage of news or claims about Generative AI. Many suggest it is the biggest technological improvement to occur in our lifetime. Generative AI is roughly analogous, they say, in terms of impact, to the arrival of the Internet, release of the first Mobile Phones or the advent of Personal Computers.

On the other hand, it could all be marketing from technology companies trying to sell us something new and using an age old technique to do it – hyping.

Is There Intensive Marketing Going On Around Generative AI?

I probably won’t have to convince you that there’s a lot of news coverage about Generative AI at the moment. It’s everywhere, every day. Consultancy organizations, software companies, journalist universities, governments – it seems everyone – is studying Generative AI. With so much data around, it’s not surprising that there are conflicting claims.

Generative AI news headlines pop up every day.

Generative AI news is everywhere.

What Are The Common Claims Made About Generative AI?

The fundamental proposition made by analysts and companies selling AI services, is that Generative AI will be a catalyst for economic growth, delivered in 2 ways.

  1. Productivity: AI will transform the labor market and workforce dynamics:Many job components, particularly in white collar fields will be automated,.
  2. Disruption: AI will accelerate innovation and problem-solving in key sectors will disrupt industries and improve them in the process with new products and lower costs.

What Does Current Data Say about Productivity ? Is AI Improving It?

A number of credible studies have been performed on white collar workers to measure the productivity improvements Generative AI delivers. Here are just 4.

  • McKinsey: 60% of job components could be automated through Generative AI
  • HBR: 44% of all worked hours could be automated. 14% improvements in a different set of tasks. Performance of typically below average workers improved more than any other group studied.
  • MIT: Generative AI improves white collar work in lab conditions by more than 40%.
  • Neilsen: Showed a 66% improvement in lab conditions for white collar tasks when Generative AI was added to the mix.
While Generative AI holds promise in terms of the productivity benefits it can deliver, those benefits are not yet shown in Australia’s labour productivity numbers.

Claims about Generative AI’s productivity improvements are not yet visible in Australia’s labour productivity numbers.

What Does Current Data Say about Disruption ? Is AI Improving It?

There is evidence that Generative AI is causing real world disruption now.

  • Protein folding: Generative AI is producing many, many new types of protein through simulation. These new proteins will improve Gene Edited drugs and drug development
  • Patents for drugs: A whole slew of companies has already successfully used Generative AI to patent more drugs in a year than any other pharma has ever before.
  • Material discovery: Google’s Deepmind project has cooked up hundreds of new materials ‘recipes’ already which might be useful for applications including electronics.

In summary, the evidence seems to suggest that the major claims made about the real and potential beneficial effects of Generative AI on these 3 areas appear to be fact based and believable.

Conclusion : Is Generative AI Hype?

Microsoft had a great quarter because of it’s AI strategy.

Microsoft’s share price increases from AI suggest that some smart analysts believe the productivity forecasts.

On one hand, there is at least some evidence that Generative AI is producing real benefits. Pharmaceutical and materials startups are now clearly, disrupting their industries. 2 companies have already seen their share price increase rapidly as a result of AI. Those share price increases are, presumably, built on analysis from smart people factoring in the benefits to AI companies like NVIDIA and Microsoft from the ROI (which analysts obviously have to are real) of forecast productivity benefits which will accrue to those companies.

On the other, there are good reasons that the benefits of Generative AI have not yet been manifest in more formal reports like productivity indexes. It takes time for new technologies to propagate, be adopted and put in to use. (Gather themselves acknowledge this in their hype chart – which ultimately matures to a ‘plateau of productivity.) Productivity measures are historical, not predicted so if and when productivity benefits are seen, they will be shown in future reports, not those currently available. Companies may be shy about layoffs prompted by AI, not wishing to advertise the headcount cuts they have realized with Generative AI.

Either way, the question remains – how do we behave with respect to Generative AI now, when it might be hype? To me, it seems that acting in a way which shows that you believe the productivity benefits of Generative AI will come seems low risk with a big upside (far more productivity, better share price, happier employees). Acting as if the benefits are not real seems high risk with a big downside (out competed, disrupted, surpassed.)

A market has groups of buyers and sellers composed of individuals which (among other things) has their own view of the risk / reward profile. Personally, I’ve used Generative AI so much I can’t believe it will not be a key part of the future of work. It has saved me 50% of my time building websites in the last few months. As a result, I am investing in the stocks which I think will benefits most from the productivity gains and disruption that Generative AI may create. You might hold a different view.

So, is Generative AI a parlor trick or something you can take to the bank? Is it hype? At this stage, there are a lot of excessive marketing claims which have not yet been proven true. Until they are, given the definition of the word, yes, in my view, Generative AI is hype.