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⚙️ Interview: The mismatch of the AI Bubble

Good morning. Apple announced that it is holding its iPhone launch event on Sept. 9.

So, like it or not, Apple Intelligence is coming soon.

— Ian Krietzberg, Editor-in-Chief, The Deep View

In today’s newsletter:

AI for Good: California’s wildfire detection system

Source: CAL Fire

Last year, ALERT California and CAL Fire created and launched an AI-powered fire detection tool.

How it works: The system is connected to a network of more than 1,000 cameras; when the system detects a potential fire on the live feed, it sends an alert to firefighters and estimates the fire’s potential path and location.  

  • Once confirmed, firefighters can quickly be deployed directly to a location to mitigate the spread of the fire. 

  • The system is also positioned well for fire monitoring and evacuation planning. 

Why it matters: With wildfires, early detection is critical. Neal Driscoll, ALERT California’s director, said at the time that “remote sensing data and AI have never been more essential to develop effective and time-critical plans for wildfire prevention, protection, mitigation and response.”

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Real World AI: A robot folds a T-Shirt

Source: Hugging Face

A new application of real-world AI from Hugging Face features two robotic arms (successfully) folding a T-shirt. 

The details: The system uses neural networks to predict future motor positions from camera inputs. 

  • Each robotic arm costs $300; the setup otherwise used what have become everyday items: an iPhone camera and a Macbook Pro camera. 

It took a little more than 30 seconds (so I can fold a shirt faster), but it did accomplish the task. 

“This type of work is unironically more useful for humanity than building yet another chatbot,” Hugging Face applied policy researcher Avijit Ghosh said

Some context: “I want AI to do my laundry and dishes so that I can do art and writing, not for AI to do my art and writing so that I can do my laundry and dishes,” author Joanna Maciejewska said (rather famously) a few months ago. 

  • Her sentiment highlighted a somewhat significant mismatch in the world of current, chatbot-focused generative AI — the first industries that the paradigm of ChatGPT-like language models has worked to “disrupt” have been the creative industries.

  • But as Maciejewska said, people like doing creative things. I’ve spoken with many artists and musicians who don’t want to lose that. 

But I’ve encountered very few people who would have a problem with using a robot to do their household chores. 

Register today for Ashby’s upcoming launch event

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Ashby’s got a new feature coming — AI-assisted application review — designed to make it easier for companies to handle high volumes of inbound applications while maintaining a great candidate experience.

On September 10, Ashby will:

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  • Apple announces iPhone event for Sept. 9 (CNBC).

  • OpenAI supports California AI bill requiring 'watermarking' of synthetic content (Reuters).

  • Instacart’s future may hinge on Uber (The Information).

  • Hello, you’re here because you said AI image editing was just like Photoshop (The Verge).

  • Nearly half of AGI safety engineers have left OpenAI (Fortune).

If you want to get in front of an audience of 200,000+ developers, business leaders and tech enthusiasts, get in touch with us here.

A marketing company wants to use AI to listen in on your conversations 

Source: Unsplash

Many of us have long suspected that our phones are listening in on us, tailoring advertisements accordingly. It’s a feature that Cox Media Group claims to have developed, through something it calls “Active Listening.” 

What happened: In a pitch deck obtained by 404 Media — which was sent to at least one company — CMG said that smart devices capture “real-time intent data by listening to our conversations.” 

The company said that it uses “AI to collect this data from 470+ sources” to design highly targeted advertising campaigns around location-identified audiences that are “ready to buy.” 

  • Following the publication of the pitch deck, Google removed CMG from its partner program, Amazon said it has not and doesn’t plan to work with CMG on this and Meta said it is looking into CMG for potential violations. 

The context: CMG’s Active Listening was first reported in December of 2023 by 404 Media. At the time, CMG had content related to Active Listening published on its website; it deleted that content following the initial report. 

I contacted CMG for comment regarding the publication of this slide deck, as it remains unclear if CMG has gone ahead — or plans to — with Active Listening.

Interview: The mismatch of the AI Bubble

Source: Crunchbase

We’ve talked often about the AI Bubble — essentially, the idea that, considering the enormous investment that generative AI requires, companies are struggling to see a return to match. There were two main papers that entered into this environment in recent weeks; first, the Sequoia paper, which argued that there is a $600 billion gap in the AI industry. 

The other is the Goldman Sachs report which argued that, not only are companies struggling to see returns on their AI spend, but also that AI as a technology — due to issues of reliability and the enormous cost required to power it — is not as transformative as it has been made to seem.

  • This sentiment, in recent weeks, combined with a volatile week in the markets, where the major indices notched their worst day in years following lackluster Big Tech earnings. But the indices quickly recovered those losses. Market breadth, meanwhile, is widening in this recovery — Big Tech stocks are retreating slightly while the S&P 500 continues ratcheting higher

  • But there’s another element that enters into this mix of increasingly skeptical investor sentiment, and that’s venture capital funding, something that tells a very different story. 

In the second quarter of this year, funding to AI companies more than doubled to $24 billion, according to Crunchbase data, the highest it’s been since the launch of ChatGPT in 2022. The sector raised $12.8 billion in May, $6.3 billion in June and $5.8 billion in July. 

Outlier spikes aside, and despite the slim month-over-month reductions, we’re seeing trends that indicate a steady increase in monthly funding to AI companies, rather than a decrease.

I spoke with Crunchbase’s senior data editor Gené Teare to try and reconcile these two aspects of the AI world. 

She told me that, in some ways, attempting to align revenues with high investments is “missing the point.” 

Noting that legal tech/AI company Clio clinched the biggest round of July — at $900 million — she said that “there is obviously massive potential in providing services to that sector, but layering in AI obviously delivers much more value to those companies. And so those very big rounds are driven by the promise of AI, and I think they're already seeing some of that promise today.”

  • In the face of a steadily growing sentiment that the boom investment cycle in AI has peaked, Teare said, in the private market, “that hasn’t happened. In fact, it’s grown.” 

  • The trends, according to Teare, indicate that 2024 will be a bigger year for AI fundraising than 2023 was; that growth is “just the result of this beginning to play out a little bit, so I expect that to continue over the next couple of years.”

As a barometer of that private market, Sarah Tavel, a general partner at venture firm Benchmark, recently wrote that the $600 billion hole will get larger, since the “prize and power of ‘winning’ is too great.” She believes language models will unlock significant economic value as they improve, adding that the “economic value of AGI is constrained only by our imaginations.” (AGI, of course, remains hypothetical technology). 

I don’t think that the bubble has burst. I think the reality is that there are a few bubbles within the industry: a private market bubble, a public market bubble and a general hype bubble. Like a Venn Diagram, the three are linked, but remain separate. 

I think the public market bubble is most liable to burst soon — Nvidia’s performance this week will be a very good indicator of where the public market is at when it comes to AI (if, for instance, Nvidia exceeds expectations — but not by enough — and the stock falls).

The hype train and the VC bubble are more closely linked; both seem to be in the early innings of the hype cycle.

Which image is real?

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🤔 Your thought process:

Selected Image 1 (Right):

“The left leg looked strange ... but it gets harder and harder to tell.”

Selected Image 2 (Left):

“Hard to tell, but in image 2 bike had the expected mechanics and the t-shirt wrinkles looked real. Image 1 was just vague and I wasn't convinced the bike had pedals, chain etc.”

💭 A poll before you go

Thanks for reading today’s edition of The Deep View!

We’ll see you in the next one.

Here’s your view on AI in music:

Nearly half of the musicians among you said you’d never use AI. Around a third said you would use it in targeted ways, but never for music creation.

More than 40% of the music listeners among you said if they couldn’t be bothered to make it, you won’t be bothered to listen. A third don’t care, so long as there are disclosures.

Down to use it (I’m a musician):

  • “I am a Music Producer with the artist name Chique Geek and the best music takes advantage of any medium. You can use AI for concept generation, add to mixes, and some algorithms help with mastering but there is nothing like the human feel in nuanced execution of a music or lyric phrase and ear to make emotions stir.”

Do you think your phone is listening to you for advertising purposes?

Tell us your story.

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