The AI sector, particularly focused on generative AI, is experiencing a downturn in consumer and enterprise interest. Despite advancements and significant investments, the returns and engagement have diminished.
Points
- Major tech firms reported disappointing Q2 earnings for 2024, highlighting a downturn in the AI sector.
- Generative AI tools like chatbots face diminishing returns despite increased data and processing power.
- Firms focused on developing AGI （Artificial General Intelligence） are struggling without clear scientific consensus or consumer interest.
- Leading companies like OpenAI and Google face challenges in monetizing their AI technologies effectively.
- The future of AI investments remains uncertain as major firms reconsider their AI strategies.
The second-quarter earnings for 2024 have been disappointing for major tech firms, especially those heavily invested in generative artificial intelligence. Despite initial enthusiasm, consumer and enterprise engagement with AI tools like chatbots is waning.
Generative AI tools, including chatbots, have reached a point where the additional data and processing power result in diminishing returns. This phenomenon, often referred to as the ouroboros problem, suggests that AI’s utility may plateau unless a new breakthrough occurs.
Chatbots Aren’t Enough
When OpenAI launched ChatGPT in November 2022, it was met with widespread excitement. However, as of Q2 2024, OpenAI is facing operational losses and is in need of more funding despite launching advanced models like GPT-4 and GPT-4o. Google, which recently launched the world’s smartest chatbot, has also seen minimal public interest despite its superior performance.
The focus on developing AGI by companies like OpenAI, xAI, and Anthropic has led to massive investments without clear pathways to practical applications. AGI remains a theoretical concept with no scientific consensus, making it a risky investment.
Artificial General Intelligence
AGI is envisioned as an AI capable of performing any intellectual task that a human can, given enough resources. Companies dedicated to AGI must either develop marketable products and services, monetize consumer use, or actually invent AGI to justify continued investments.
Currently, enterprise clients exploring generative AI products do so with the expectation of an AI-powered future, but there’s little evidence that these tools are becoming indispensable. Consumer interest remains low, with subscription numbers for generative AI services falling short of those for streaming services.
Flat Spin
The broader generative AI market includes major players like Microsoft, Google, Apple, Meta, Nvidia, Amazon, and Tesla, all of which are heavily invested in the promise of AGI. However, these companies have the flexibility to pivot away from generative AI if it doesn’t yield expected results.
Amazon’s recent 9% stock drop following CEO Andy Jassy’s announcement to prioritize AI products over profits illustrates the disconnect between executive strategies and shareholder expectations. The key question is whether the AI sector can recover from its current spending spree or if major firms will abandon their AI ambitions.
Based on Q2’s earnings and market movements, it seems likely that shareholders and investors may ultimately decide to pull back on AI investments unless a significant breakthrough in AGI development is achieved.
解説
- Diminishing Returns: The ouroboros problem highlights the point where increased investment in data and processing for AI yields fewer benefits, similar to the law of diminishing returns in economics.
- AGI vs. Narrow AI: While AGI aims to replicate human intelligence broadly, narrow AI focuses on specific tasks. The lack of a clear path to AGI makes narrow AI applications more practical currently.
- Market Response: The market’s reaction to Q2 earnings suggests skepticism about the immediate profitability of generative AI investments. Companies may need to diversify their strategies to maintain investor confidence.