Generative AI’s Second Act | | | | Turtles AI

#Sequoia Capital explores the second act of #generativeAI and its impact on the #technology landscape. The article discusses the initial excitement, the subsequent challenges, and the emerging trends in the #industry. With examples of successful applications, the authors highlight the #potential and #limitations of generative AI. In a recent article published by Sequoia Capital, the venture capital firm delves into the second act of generative AI and its impact on the technology landscape. The authors, Sonya Huang, Pat Grady, and GPT-4, discuss how generative AI has evolved over the years and the challenges it currently faces. The article begins by highlighting the rapid progress made in generative AI, comparing it to a modern-day space race. The combination of advancements in compute power, the availability of massive amounts of training data, and the proliferation of mobile and cloud computing has set the stage for generative AI to take flight. The authors acknowledge the initial excitement surrounding generative AI, sparked by the success of ChatGPT. However, they also address the subsequent hype and borderline hysteria that ensued, with every company proclaiming to be an "AI copilot." This led to a frenzy of fundraising, talent wars, and GPU procurement, which ultimately revealed cracks in the industry. The article mentions the challenges faced by generative AI, including skepticism from artists and writers regarding machine-generated intellectual property, ethical debates, and concerns about superintelligence. Additionally, there was a growing sentiment within Silicon Valley that generative AI was not as useful as initially believed, as user retention for many applications fell short of expectations. Despite these challenges, the authors emphasize that generative AI has already achieved significant success, with over $1 billion in revenue from startups alone. They highlight the emergence of household names like ChatGPT, Midjourney, and Character, which have gained popularity among students, developers, and entertainment enthusiasts. However, the authors caution that not all AI companies have achieved product-market fit or a sustainable competitive advantage. They note that the overall enthusiasm in the AI ecosystem may not be sustainable in the long run. Looking ahead, the authors discuss the transition from the first act of generative AI, characterized by lightweight demonstrations of new technology, to the second act focused on solving human problems end-to-end. They highlight companies like Harvey, Glean, and Character and Ava, who are leading the way in this transition. The article concludes with a reflection on the authors’ initial thesis for the generative AI market opportunity. They acknowledge some inaccuracies, such as underestimating the speed of progress and the bottlenecks in GPU supply. However, they also highlight the accuracy of their prediction that generative AI would become a significant trend.   Highlights: - Generative AI has achieved significant success, with over $1 billion in revenue from startups alone. - Skepticism and debates surrounding machine-generated intellectual property and ethical concerns. - Transitioning from lightweight demonstrations to solving human problems end-to-end. - Some AI companies struggle with product-market fit and sustainable competitive advantage. - The overall enthusiasm in the AI ecosystem may not be sustainable in the long run.   Invite to discussion: The article provides a comprehensive analysis of the current state of generative AI, highlighting both its successes and challenges. What are your thoughts on the sustainability of the AI ecosystem and the potential for generative AI to solve real-world problems? Join the conversation and share your insights.