5 ms·

Investors who do nothing but follow the crowd dumped a tonne of money into cryptocurrency / blockchain startups regardless of merit. Now they are doing the same

Investors who do nothing but follow the crowd dumped a tonne of money into cryptocurrency / blockchain startups regardless of merit. Now they are doing the same with AI. But AI actually has clear, immediate, and lasting value. Articles like this seem to be written by people who don’t understand the basic concepts about people who don’t understand the basic concepts. Both sets of people just seem to identify the trends and mistake the trend for the overall value. AI only looks like cryptocurrency / blockchain if you don’t know anything at all about either one beyond “they are trendy and attract people who like investing in trendy things”.

doctor_eval 3y ago
Couldn’t agree more. Crypto was a monetizable solution in search of a problem. AI solves real problems, and has been doing so for many years. Generative AI is just the latest and most accessible instantiating of it. My first company was a dialup ISP in the 90s. I look at GPT4 and I see the 56K modem of AI. There is so much upside to be discovered, we have barely started.
- darkwater 3y ago
  > Couldn’t agree more. Crypto was a monetizable solution in search of a problem. True > AI solves real problems AI research and real products, most probably. All those new companies/startups that are wrappers around ChatGPT? Not that much. Maybe someone will do something that really brings value but most of them sound and act like the Blockchain startups we had til 12 months ago.
  - apexalpha 3y ago
    Have you seen the new AI photoshop where you can just AI fill anything? And it just works? The amount of people who can edit photo's is now basically unlimited. That's thanks to generative AI. Same like how the computers enabled billions to do the most complex calculations within a second, while before you needed to learn that skill over years or practise.
    - ben_w 3y ago
      > Have you seen the new AI photoshop where you can just AI fill anything? And it just works? > The amount of people who can edit photo's is now basically unlimited. That's thanks to generative AI. It's also available at zero cost, thanks to the ecosystem around Stable Diffusion. You probably know the meme that gets parroted randomly about OpenAI needing a moat; well, what's Adobe's moat, now that this exists?
      - stale2002 3y ago
        > well, what's Adobe's moat, now that this exists? Although this is debatable, lets accept it for the sake of argument that adobe has no moat. If this is the case, this may be bad for adobe, but it is amazing for the design world. Producing more art for cheaper is real value. And we may not know who specifically will capture that value, but it is undeniably value none the less that will go somewhere. That still benefits the economy as a whole, even if we can't guess which AI startup will win the race.
        trashtester 3y ago
        > Producing more art for cheaper is real value. Except that if art production becomes too easy, the prices go down, and the only party benefiting is the consumer/customer.
        stale2002 3y ago
        Fortunately, the only party that matters is the consumer. Businesses may exist and be necessary to serve the consumer. But they are not valuable in and of themselves.
        zirgs 3y ago
        As if that's a bad thing.
        trashtester 3y ago
  - doctor_eval 3y ago
    GPT wrapper products are the equivalent of static corporate HTML pages from the 90s. We build them because we are the early adopters of a brand new technology and we’re working out how it works. I’m working with such a company and yes, the first product is a (very nuanced and very domain specific) wrapper around GPT. But as we gain experience, we expect to develop far more complex and interesting products. But we gotta start somewhere. 2 years ago, nobody even knew about ChatGPT. We are at the very start of this wave and we’re just still plucking the low hanging fruit. The fact that GPT wrappers are useful speaks directly to the potential of the technology. Contrast this with crypto, which wasn’t even capable of solving the problems it was supposed to solve, and where losses incurred by things like smart contracts were almost inevitable. The products being built with AI are real products that real people are paying for. The difference couldn’t be more stark.
    - vineyardmike 3y ago
      > 2 years ago, nobody even knew about ChatGPT So chatGPT isn’t 2 years old, but i recently discovered that if you search HN for GPT-2, you’ll discover years of people discussing it, below hype levels. You’ll find “did GPT2 write this” type comments that we see today with 3,4. You’ll see people train it against their texts to talk to themselves. A lot of the ChatGPT induced hype hypotheticals were already done.
      - doctor_eval 3y ago
        > A lot of the ChatGPT induced hype hypotheticals were already done I really disagree with this. The more broadly useful and available this technology becomes, the more interesting and unexpected uses will be discovered for it. The people I'm working with now are not remotely software people but they are generating real value from GPT in ways I would never have imagined. I look at what they're doing and I think to myself - a seasoned software engineer - OMG that's incredible, I would never have thought to use it that way. That's why I say that GPT4 is the 56K modem of AI. Until now it's just been largely software geeks. But now that it's getting out into the broader world, people are coming up with novel ways to use it that are unexpected and occasionally ingenious. Ways to help people that most software engineers wouldn't have the domain experience to think of. And they're just getting started.
- bombolo 3y ago
  I think the problem was "buy drugs online"
- mrweasel 3y ago
  My concern would be that the investors can't tell the good from the bad and will throw money at anything that has "AI" checkbox on the box. So money won't necessarily to the projects where it's could generate the most value. Large amounts of money is going to go to those who promise the most amazing things and really hype the AI. In the end I doubt that those who are able to use AI most effectively will need to slap the "AI" label on their products, they'll just be the better products. As much as I believe crypto-currencies to be mostly a scam, blockchain technology exists in products most of us aren't even aware of, because it's a neat solution to a certain set of problems. It's just not all that sexy.
mihaaly 3y ago
None of those "knowing why others are stupid" and "AI is muchmuchmore useful" matters if the topic is rampaged and distorted by clueless pile of wealth into momentary apparent fame instead of developed sensibly. Crypto and blockchain could have had much better merit if it's reputation was not destoyed by forced through careless mania. The society will f up AI into something of a freak, maybe even quicker due to its powerful hence scary nature, if maniacs push into something where it causes serious damages or cathastrophy, triggering hard regulations and bans. At least for our lifetime, slowing its much needed introduction to life to several generations timespan. AI could, and probably will, be castrated rapidly by the frenzy of huge piles of clueless money.
ak_111 3y ago
I think you are being harsh on the critics. A technology can have tremendous value while still attracting grifters and being an early investors' graveyard. Best example is the dot com bubble in 1996 - 2001, the web had truly world-changing potential, but grifting was rife and practically all early investors lost their money unless you were one of the lucky ones who invested in amazon, yahoo, google or ebay out of the 10,000 companies that were shilling back then (and even then you had to be very patient not to sell your stock for decades to make the really big gains - see the history of amazon and apple stock during this era). There are many such examples in history of technology concerning grifters and the fate of early investors see also automobiles and printing press (even in printing press Guttenberg lost a lot of money and had many grifters/copycats)
- trashtester 3y ago
  Most companies failed, not necessarily most investors. If you'd put your money into a Nasdaq based index fund in 1998 (that reinvested all dividends), you would have a pretty good return up to today. Most good investors either spread out like that, or are very good at reasearching what companies have real promise and what do not.
- bakuninsbart 3y ago
  > A technology can have tremendous value while still attracting grifters and being an early investors' graveyard. Not sure how this compares to other recent technology revolutions, but most AI startups seem to be one feature announcement from Microsoft away from bancrupcy. So even with the best intentions of founders, it seems like a really volatile market.
  - ak_111 3y ago
    This is very similar to the app start-up craze that apple triggered. After every new iOS release or new FB announcement there were a multitude of app startups that were made redundant. For example there were plenty of startups focused on bookmarking websites, or sharing notes, or allowing in-game adverts.

doctor_eval 3y ago

Couldn’t agree more. Crypto was a monetizable solution in search of a problem. AI solves real problems, and has been doing so for many years. Generative AI is just the latest and most accessible instantiating of it. My first company was a dialup ISP in the 90s. I look at GPT4 and I see the 56K modem of AI. There is so much upside to be discovered, we have barely started.

darkwater 3y ago
> Couldn’t agree more. Crypto was a monetizable solution in search of a problem. True > AI solves real problems AI research and real products, most probably. All those new companies/startups that are wrappers around ChatGPT? Not that much. Maybe someone will do something that really brings value but most of them sound and act like the Blockchain startups we had til 12 months ago.
- apexalpha 3y ago
  Have you seen the new AI photoshop where you can just AI fill anything? And it just works? The amount of people who can edit photo's is now basically unlimited. That's thanks to generative AI. Same like how the computers enabled billions to do the most complex calculations within a second, while before you needed to learn that skill over years or practise.
  - ben_w 3y ago
    > Have you seen the new AI photoshop where you can just AI fill anything? And it just works? > The amount of people who can edit photo's is now basically unlimited. That's thanks to generative AI. It's also available at zero cost, thanks to the ecosystem around Stable Diffusion. You probably know the meme that gets parroted randomly about OpenAI needing a moat; well, what's Adobe's moat, now that this exists?
    - stale2002 3y ago
      > well, what's Adobe's moat, now that this exists? Although this is debatable, lets accept it for the sake of argument that adobe has no moat. If this is the case, this may be bad for adobe, but it is amazing for the design world. Producing more art for cheaper is real value. And we may not know who specifically will capture that value, but it is undeniably value none the less that will go somewhere. That still benefits the economy as a whole, even if we can't guess which AI startup will win the race.
      - trashtester 3y ago
        > Producing more art for cheaper is real value. Except that if art production becomes too easy, the prices go down, and the only party benefiting is the consumer/customer.
        stale2002 3y ago
        Fortunately, the only party that matters is the consumer. Businesses may exist and be necessary to serve the consumer. But they are not valuable in and of themselves.
        zirgs 3y ago
        As if that's a bad thing.
        trashtester 3y ago
- doctor_eval 3y ago
  GPT wrapper products are the equivalent of static corporate HTML pages from the 90s. We build them because we are the early adopters of a brand new technology and we’re working out how it works. I’m working with such a company and yes, the first product is a (very nuanced and very domain specific) wrapper around GPT. But as we gain experience, we expect to develop far more complex and interesting products. But we gotta start somewhere. 2 years ago, nobody even knew about ChatGPT. We are at the very start of this wave and we’re just still plucking the low hanging fruit. The fact that GPT wrappers are useful speaks directly to the potential of the technology. Contrast this with crypto, which wasn’t even capable of solving the problems it was supposed to solve, and where losses incurred by things like smart contracts were almost inevitable. The products being built with AI are real products that real people are paying for. The difference couldn’t be more stark.
  - vineyardmike 3y ago
    > 2 years ago, nobody even knew about ChatGPT So chatGPT isn’t 2 years old, but i recently discovered that if you search HN for GPT-2, you’ll discover years of people discussing it, below hype levels. You’ll find “did GPT2 write this” type comments that we see today with 3,4. You’ll see people train it against their texts to talk to themselves. A lot of the ChatGPT induced hype hypotheticals were already done.
    - doctor_eval 3y ago
      > A lot of the ChatGPT induced hype hypotheticals were already done I really disagree with this. The more broadly useful and available this technology becomes, the more interesting and unexpected uses will be discovered for it. The people I'm working with now are not remotely software people but they are generating real value from GPT in ways I would never have imagined. I look at what they're doing and I think to myself - a seasoned software engineer - OMG that's incredible, I would never have thought to use it that way. That's why I say that GPT4 is the 56K modem of AI. Until now it's just been largely software geeks. But now that it's getting out into the broader world, people are coming up with novel ways to use it that are unexpected and occasionally ingenious. Ways to help people that most software engineers wouldn't have the domain experience to think of. And they're just getting started.
bombolo 3y ago
I think the problem was "buy drugs online"
mrweasel 3y ago
My concern would be that the investors can't tell the good from the bad and will throw money at anything that has "AI" checkbox on the box. So money won't necessarily to the projects where it's could generate the most value. Large amounts of money is going to go to those who promise the most amazing things and really hype the AI. In the end I doubt that those who are able to use AI most effectively will need to slap the "AI" label on their products, they'll just be the better products. As much as I believe crypto-currencies to be mostly a scam, blockchain technology exists in products most of us aren't even aware of, because it's a neat solution to a certain set of problems. It's just not all that sexy.

mihaaly 3y ago

None of those "knowing why others are stupid" and "AI is muchmuchmore useful" matters if the topic is rampaged and distorted by clueless pile of wealth into momentary apparent fame instead of developed sensibly. Crypto and blockchain could have had much better merit if it's reputation was not destoyed by forced through careless mania. The society will f up AI into something of a freak, maybe even quicker due to its powerful hence scary nature, if maniacs push into something where it causes serious damages or cathastrophy, triggering hard regulations and bans. At least for our lifetime, slowing its much needed introduction to life to several generations timespan. AI could, and probably will, be castrated rapidly by the frenzy of huge piles of clueless money.

ak_111 3y ago

I think you are being harsh on the critics. A technology can have tremendous value while still attracting grifters and being an early investors' graveyard. Best example is the dot com bubble in 1996 - 2001, the web had truly world-changing potential, but grifting was rife and practically all early investors lost their money unless you were one of the lucky ones who invested in amazon, yahoo, google or ebay out of the 10,000 companies that were shilling back then (and even then you had to be very patient not to sell your stock for decades to make the really big gains - see the history of amazon and apple stock during this era). There are many such examples in history of technology concerning grifters and the fate of early investors see also automobiles and printing press (even in printing press Guttenberg lost a lot of money and had many grifters/copycats)

trashtester 3y ago
Most companies failed, not necessarily most investors. If you'd put your money into a Nasdaq based index fund in 1998 (that reinvested all dividends), you would have a pretty good return up to today. Most good investors either spread out like that, or are very good at reasearching what companies have real promise and what do not.
bakuninsbart 3y ago
> A technology can have tremendous value while still attracting grifters and being an early investors' graveyard. Not sure how this compares to other recent technology revolutions, but most AI startups seem to be one feature announcement from Microsoft away from bancrupcy. So even with the best intentions of founders, it seems like a really volatile market.
- ak_111 3y ago
  This is very similar to the app start-up craze that apple triggered. After every new iOS release or new FB announcement there were a multitude of app startups that were made redundant. For example there were plenty of startups focused on bookmarking websites, or sharing notes, or allowing in-game adverts.