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“What are the chances…”
Approximately 100%.
That doesn’t mean that the slide will absolutely continue. There may be some fresh injection of hype that will push investor confidence back up, but right now the wind is definitely going out of the sails.
The core issue, as the Goldman - Sachs report notes, is that AI is currently being valued as a trillion dollar industry, but it has not remotely demonstrated the ability to solve a trillion dollar problem.
No one selling AI tools is able to demonstrate with confidence that they can be made reliable enough, or cheap enough, to truly replace the human element, and without that they will only ever be fun curiosities.
And that “cheap enough” part is critical. It is not only that GenAI is deeply unreliable, but also that it costs a truly staggering amount of money to operate (OpenAI are burning something like $10 billion a year). What’s the point in replacing an employee you pay $10 an hour to handle customer service issues with a bot that costs $5 for every reply it generates?
The problem is that even the specific things they’re good at, they don’t do well enough to justify spending actual money on. And when I say “actual money”, I’m not talking about the hilariously discounted prices AI companies are offering in an effort to capture an audience.
A bot that can do a job reasonably well, but still needs a human to check their work is, from an employment perspective, still an employee, just now with some very expensive helper software. And because of the inherent unreliability of LLMs, a problem that many top figures in the industry are finally admitting may never be solved, they will always need a human to check their work. And that human has to be competent enough to do the job without the AI, in order to figure out where and how it went wrong.
GenAI was supposed to put us all out of work, and maybe one day it will, but the current state of the technology isn’t remotely close to being good enough to do that. It turns out that while bots can very effectively look and sound like humans, they’re not remotely capable of thinking like humans, and that actually matters when your chatbot starts promising customers discounts that don’t actually exist, to name one real example. What was treated as being the last ten percent is actually looking more and more like ninety-nine percent of the work in terms of creating something that can effectively replace a human being.
(As an aside, I can’t help but feel that a big part of this epic faceplant arises from Silicon Valley fully ingesting the bullshit notion of “unskilled labour”. Turns out working the drive thru at McDonald’s is a more complicated job than people think, including McDonald’s themselves. We’ve so undervalued the skills of vast swathes of our population that we were easily deluded into thinking they could all be replaced by simple machines. While some of those tasks certainly can, and will, be automated, there are some human elements - especially in conflict resolution - that are really hard to replace)