The pattern is distinct and yet we never seem to recognize it. Or if we do, it doesn’t influence our behavior.
Step 1. New technology emerges
Step 2. PR ensues
Step 3. Tech media uncritically rushes to anoint the Next Big Thing
Step 4. VC funding pours in like that scene in Titanic
Step 5. FAANG companies rush to develop internal versions of the Next Big Thing
Step 6. ~ time passes ~
Step 7. The Next Big Thing crashes with a thud or fizzles into oblivion
Crypto is the most blatant and recent instance of the phenomenon, but digital assistants, wearables, and VR are just a few more examples we’ve witnessed over the last decade in the growth economy.
We’re currently in Step 4 or maybe 5 with the A.I craze and it’s showing no signs of slowing.
From the above NY Times piece:
“Suddenly, Mobius — little more than more than four guys and a laptop — was valued around $100 million, an usually high number for a start-up that was just a week or so old, the people said. When word of the deal leaked out, other investors descended to urge Mobius to take their money, too, they said.”
How much money must one possess to be urging unproven startups to please just take it, already? Silicon Valley interests prove time and again why we shouldn’t rely on them to chart the course of our big collective efforts. There is much wealth amassed in the hands of this small cohort that speculation takes on a paradoxically desperate quality. Failing to find a golden goose becomes a form of poverty in the dynamics of this twisted micro-economy. The incentive becomes to find the startup that returns the most hype, not the most value. Surely there are better uses for this money than as gambling chips in the egomaniacal card games of our country’s sassiest job creators.
The AI hype is coming in many forms these days. From well-intentioned but overly enthusiastic journalists to spotlight-seeking AI experts, the presumption of technology’s inevitable forward march remains our blind spot and our pathology. In a world of speculation, old school market fundamentalists like Scott Galloway and Betsy Cohen sound like they are living in a different world. Given that growth stocks have outperformed the S&P 500 Value by 400% since 1995, it might be time to rearticulate what drives our economy. The speculative economy pulls us along, but its byproduct is waste in the form of talent and time.
What lies behind our refusal to learn from these ceaseless hype cycles? Capitalism is of course the main reason.1 The VCs, opining loudly from their ski cabins need something to hawk, lest the speculative well run dry and their house of cards collapse. It’s fine to go all in, but if you never face any real consequences for failure, the game is rigged.
There also seems to be a psychological aspect to this speculative obsessiveness. After all, the famed frontier of American history requires virgin territory. We seem to require shiny newness for our society to even function, let alone thrive. But as we round the corner of the 21st century into a future that suggestions American decline and climate crisis we might consider how to course correct towards something a little more sustainable.
What might we do with our time, energy, and resources if we practiced some restraint and abstained from throwing ourselves headlong into wave after wave of tech futurism? One alternative approach is to invest resources into things that already exist. To take just one example: there’s fear that our public transportation systems are on the brink of collapse. Doesn’t it make more sense, objectively, to plow funding into that problem than spending time figuring out which nails might exist for our shiny new hammer2?
I’m not saying that there are no use cases for generative A.I., I’m simply saying that we should prove them out before jumping to conclusions about our utopian/dystopian futures. We should strive to think of innovation like a trial jury thinks of their verdict. In this case, the burden of proof is on the technology to prove its staying power. I’m not sure what the success ratio of new technologies is in the court of the public market, but it’s not high.
Smart, well-resourced people should be working on useful things. But if they’re going to flock ambitiously to the epicenter of culture, our culture needs to be more honest about the value it is or is not creating. A.I.-generated sales videos is not the answer we are looking for. See you at the next dip.
Cultivating my Gen Z fanbase
“To a man with a hammer, everything looks like a nail.” – Abraham Maslow