GenAI startups secured $14.1B in the first half of 2023 — more than 5x 2022’s year-end total. Many investors complain that the technology is over hyped -and now it’s official – generative AI is at the peak of Gartner‘s hype cycle for emerging technologies in 2023. This comes months after ChatGPT traffic has started to decline, as I covered on a previous post on VC Cafe.
“The Hype Cycle for Emerging Technologies is unique among Gartner Hype Cycles because it distills key insights from more than 2,000 technologies and applied frameworks that Gartner profiles each year into a succinct set of “must-know” emerging technologies. These technologies have potential to deliver transformational benefits over the next two to 10 years “
Reaching peak hype doesn’t mean that the potential of generative AI isn’t real. After all, the adoption of generative AI has been faster than many other technologies, including smartphones. According to eMarketer, generative AI adoption is forecasted to climb to 77.8 million users over the next couple of years (doubling adoption rate of smartphones and tablets).
Just last month, Amazon CEO Andy Jassy revealed that every team within the company is actively working on generative AI projects, spanning entertainment, AWS, advertising, and devices. Jassy expressed the importance of GenAI, saying it will be at the heart of operations and represent a significant investment and focus for the company.
Reaching peak hype however, means that the expectations and buzz are at a max point. I expect that we’ll continue to see generative AI enter the enterprise, but as previously covered on VC Cafe (link in comments) there are major uncertainties in adoption as a result of:
- Copyright/ training data
- Inaccuracy / model hallucinations
- Data privacy
- Pending regulation
According to the latest McKinsey survey on the state of AI in 2023, 79% of all respondents say they’ve had at least some exposure to gen AI, either for work or outside of work, and 22% say they are regularly using it in their own work. That said, when it comes to enterprise adoption, many organisations are reluctant to embrace generative AI at scale yet and only 21% have policies about using generative AI at work (interestingly, Samsung banned employees from using ChatGPT as employees were pasting internal data, Google banned the use of AI chatbots including its own Bard, etc.
The Gartner report also highlights other emerging technologies that in the next 10 years will present benefits for early adopters, including:
- Emergent AI – These technologies include AI simulation, causal AI, federated machine learning, graph data science, neuro-symbolic AI and reinforcement learning
- Developer Experience (devx) – DevX refers all aspects of interactions between developers and the tools, platforms, processes and people they work with to develop and deliver software products and services.
- Pervasive Cloud – Key technologies enabling the pervasive cloud include augmented FinOps, cloud development environments, cloud sustainability, cloud-native, cloud-out to edge, industry cloud platforms and WebAssembly (Wasm).
- Human-centric security and privacy – Key technologies supporting the expansion of human-centric security and privacy include AI TRISM, cybersecurity mesh architecture, generative cybersecurity AI, homomorphic encryption and postquantum cryptography.
At Remagine Ventures, we started investing in generative AI in 2019, way before the hype. If you’re an Israeli or UK founder starting to build a company in this space, we’d love to chat.