The AI Boom Looks a Lot Like a Bubble
The current wave of excitement around generative AI is hard to miss, but a closer look suggests a widening gap between promise and reality. The dominant story says AI is on the verge of awakening, that it will suddenly become reliable, intelligent, and transformative if we just feed it more data and more money. That story does not hold up. The more convincing analysis is that today’s AI systems consistently underperform relative to the hype. They are often best understood as sophisticated add-ons to existing tools rather than world-changing breakthroughs. Video editing, text generation, and image creation have improved, but not in ways that justify the breathless claims being made on their behalf. Capabilities, Errors, and Incentives One of the defining traits of current AI systems is their tendency to hallucinate. They produce confident, incorrect outputs in ways that are difficult to predict or prevent. From a user’s perspective, this is a serious flaw. From a company’s persp...