Noelle Acheson, today's guest writer, is the former head of research at CoinDesk and Genesis Trading. This article is excerpted from her Crypto Is Macro Now newsletter, which focuses on the overlap between the shifting crypto and macro landscapes.
We've seen this before. A radical technological breakthrough spins off applications that promoters insist will revolutionize whatever industry they happen to be targeting. Breathless conferences promise that nothing will ever be the same again. Funding floods in at back-of-the-envelope valuations based on exponential growth. I could be talking about the crypto circuit circa 2016-17. But today, I'm talking about artificial intelligence (AI).
It's hard to not be mesmerized by the attention AI is getting, and perhaps motivated by the inflated promises. The impact, even at this early stage, is exciting: The ability to interface with computing power using natural language is a massive productivity unlock, and the creativity boost through almost instant images and prose is both helpful and entertaining. And that's just scratching the surface.
But the hype we're hearing around AI now is reminiscent of the hype we heard around crypto and blockchain years ago. That was misplaced, as is today's. The impact of crypto and blockchain is real and will continue to evolve; it's just not what some tried to sell the public in the early days. The same will happen with AI – the impact will be considerable, but the hype is setting the field up for disappointment. Here are just a few choice examples:
AI will "permanently disrupt" education. The internet arguably did this, but are people happy with the state of education these days?
AI will predict medical problems before they happen. Obviously, this would be amazing, but would better predictions improve diagnoses, or could they introduce more risks? If AI-powered medicine can save even one life then I'm all for it, but I worry about the general anxiety cost and the missed diagnoses because the predictive algorithm didn't flag anything.
AI can help fight climate change. Faster information processing can deliver useful maps of trigger areas that could help focus prevention efforts. But what about all those guzzling data centers?
AI combined with nuclear fusion will make us a super-species. And facilitate intergalactic travel.
We will never have to worry again. This is from Sam Altman, the CEO of OpenAI.
Perhaps I sound like a crypto enthusiast who hates the idea of another hot technology stealing our ecosystem's thunder. Far from it – I hated the early-stage crypto hype as well, the promises that "blockchain will change everything!" and "everything will be tokenized!" In fact, I'm excited for the future of AI.. But want to be mindful.
I'm also supportive of the migration of VC attention. You'll probably have seen comments from prominent Silicon Valley representatives saying things like "If you're in crypto, pivot to AI." By all means, those venture capitalists that chase the latest technology should definitely do that. This would significantly reduce funding in the crypto ecosystem, but the crazy money that was being flung around a couple of years ago led to unrealistic valuations, unsustainable structures and some really bad behavior.
A tighter funding environment will hopefully mean that those startups or later-stage operations that do get funding will have a stronger product/market fit, run a leaner operation and as a result have a better chance of survival while not burning through easy VC cash.
The AI field is welcome to the hypesters as well: the techno-utopians convinced that technology brings out our better natures, the visionaries that believe funding should be based on faith rather than utility, the consultants that want to frighten you into paying for their services.
If AI deflects the "hot" funding, diverts the hyperbole and siphons off those that were only in it for the money, the crypto ecosystem will be stronger for it. Blockchain promises will become more focused. The expected value can get more real.
The crypto ecosystem will also benefit from potential overlaps, and there are many. Easier coding for blockchain-based apps, decentralized storage for vast pools of data, shared incentives for sustainable power solutions for data centers are just the tip of an exciting pyramid of possible synergies.
I venture that another overlap could be applying lessons learned from the crypto hype. Vast opportunity is exhilarating, and if we don't reach high, we'll never know how high we can go. But too many broken promises weakens credibility, disillusions investors and gives detractors plenty of fuel.
The AI field probably has to go through the process, though, and learn this for itself. I applaud genuine excitement for the motivation it spreads and the hope it delivers. My concern is when that excitement becomes opportunistic and manipulative. Those who care about our collective future, with all the solutions and risks technology can bring, deserve better.
– Noelle Acheson
@NoelleInMadrid
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