Artificial Intelligence: A Cold Winter Approaches

The winter is fast approaching, and weather forecasters are predicting that the temperature is likely to drop to zero and below. So, we can look forward to wrapping up in our winter woollies and turning up the heating a tad, to ease the chill. Yet, there’s another kind of wintry breeze gently brushing against industry. Our frosty winter seems to be extended to the future of artificial intelligence, where some are becoming increasingly nervous about its future.

Cautious About the Fugazi

Industry and others are becoming aware of the relentless attention and hype surrounding AI and are now questioning its longer-term prospects. In fact, over my career, I have seen several technologies receiving a bloated start on their journey to maturity. This has been typically fuelled by overzealous marketers delivering hyperbole for a technology that’s nowhere near ready. In fact, many technologies are exaggerated way beyond their real-world functionality and capabilities and, of course, artificial intelligence is no exception.

AI is currently enduring a lone battle, as it strives toward a defined and clear role and purpose. Likewise, over many generations AI has routinely struggled with a series of hype cycles, where many innovators have reinvigorated the notion over each period in which the concept is reimagined, as new ideas and technology emerge. This cyclic impact results in a rollercoaster ride: At its high, we become excited about new prospects and opportunities, whereas, when the ride hits a low point, we tend to lose interest and the excitement consequently wanes which, in turn, triggers yet another winter event. Undoubtedly today, artificial intelligence is undergoing an enormous high, causing some of us to be increasingly cautious about its ‘fugazi.’

Artificial Intelligence is Just Clever Software

The numerous setbacks which have culminated in AI winters have been largely due to misplaced hype, lack of investment, and the inadequacy of the technology over these periods. However, today, artificial intelligence is again amassing further excitement due to an explosive funding regime from various organisations and ‘big tech’ giants, all of whom are heavily investing in its re-imagined possibilities. They are all too eager for us to look beyond the fact that our so called ‘brave new world’ is currently nothing more than clever programming and smart technology—and that’s it, all this AI malarkey is just algorithms.

As the inevitable chill hits the air, there are some in the industry who suggest we are on the verge of another winter and, we may also embark upon an “AI recession,” that is, a lack of funding or a change of mind in financing, because of AI’s continued exaggeration. If I’m honest, we are all yearning for artificial intelligence to take on far more responsibility—but it needs to shift several gears up to offer us a viable future, and alas, it hasn’t really moved beyond rudimentary functionality. Nonetheless, with ChatGPT, Gemini, Copilot and other similar tools, we may be witnessing an upshift in algorithms that start bringing in value and, of course, clever software techniques that often beset deepfakes and the like—but again, this is just software.

Global Financial Markets Could Face Turbulence

Clever software and programming have enabled us to manipulate voice, sound, images and video but, strictly speaking, shouldn’t be labelled as ‘artificial intelligence’ since AI is the replication of human-like cognition in a machine using software, which the above tools I mentioned, are beginning to address.

The source of this uneasiness is drawn from the Bank of England’s (BoE) analysis of the American financial market. In its latest assessment of the global financial system, the BoE has echoed growing concerns about potential risks emerging from the United States that could have significant implications for the UK. The BoE has warned that global financial markets could face turbulence if investors reverse their current optimism surrounding the future prospects of AI—a view, which is also shared by the International Monetary Fund (IMF) (source: Bank of England warns of 'sharp correction' for markets if AI bubble bursts - and IMF agrees)

Until next time…

The launch of ChatGPT in 2022 sparked a comparison to the arrival of the internet in the 1990s. With the furore back then, many companies were making millions, that is until its bubble burst later in 2000, where panic ensued across the market and interest rates rose, investors sold their assets, and businesses collapsed, with many jobs loses.

As such, the AI sector is fearful of a similar outcome to that of the internet ‘boom and bust.’ (source: Is the AI bubble about to burst after Bank of England warns of dot-com crash repeat?). On another note, tech giants and the like, are now under mounting pressure to deliver tangible results from their hefty AI investments, as soaring market valuations collide with negligible evidence of real-world productivity benefits. (source: Microsoft, Alphabet and Meta results overshadowed by growing fears of AI bubble).

With this in mind, let’s be clear as to what we are trying to achieve and what the problems we are attempting to solve. After all, we should never develop technology for technology’s sake, a mindset that I fear is partially responsible for inflating the bubble.

So, this is where an “always thinking” Dr G signs off.