People are underestimating the impact of AI. There is a lot of talk about hype and whether the impacts are being overblown. They are not. Those who make these types of assertions fall into two camps:
A) the ones who only look at markets, focusing upon the run up in some stocks
B) those who fail to grasp what we are dealing with
Most are aware of ChatGPT. That was a game changer, at least from the user perspective. Before that, chatbots were rather technical. What OpenAi did was put a user friendly front end on its technology. Naturally, there was a lot in place before this occurred, years of development.
OpenAI gave most of the world its first glimpse into the future. ChatGPT changed everything.
One thing that gets overlooked is the "GPT" part. How many people know what that means? Can you define this acronym?
Here is where I think a fair bit of misunderstanding occurs.
Image generated by Ideogram
Generative AI: General Purpose Technology And Its Impact On The World
What does GPT mean?
This is short for general purpose technology. Throughout history there are roughly 20 or so that people place in this category. What this means is we are dealing with something that will completely alter society.
To gain more insight, we get this from Wikipedia:
General-purpose technologies (GPTs) are technologies that can affect an entire economy (usually at a national or global level). GPTs have the potential to drastically alter societies through their impact on pre-existing economic and social structures. The archetypal examples of GPTs are the steam engine, electricity, and information technology. Other examples include the railroad, interchangeable parts, electronics, material handling, mechanization, control theory (automation), the automobile, the computer, the Internet, medicine, and artificial intelligence, in particular generative pre-trained transformers.
In other words, this is akin to electricity.
So let us look at the first camp of "hype" pushers. Do you think electricity (or the steam engine) was overhyped? Certainly there might have been companies that were pumped only to end up going broke. Nevertheless, we see what happened to the world once electricity was introduced
Compare society in the late 1700s to the early 1900s. That saw remarkable change simply due to electricity, not mentioning the other innovations. We will look back upon the pre-AI era like it was the stone age.
As for the second camp, this should clarify things. We are not really talking about chatbots, image generators or text-to-video. This is much bigger.
One thing to consider is the fact that everything non-human that moves willl be autonomous. Think about how that changes society.
Economic Singularity
We have discussed the economic singularlity before. This is something that should be understood with the framing of AI as a GPT.
It is fairly simple to theorize the economic impact based upon generative AI being a GPT. Think of how economic productivity changed throughout the industrial and semiconductor (computer) revolutions.
What is different this time is the speed. Andrew McAfee researched the time of adoption with this technology.
In a recent report about the economic impact of generative AI, Google visiting fellow and MIT Sloan principal research scientist Andrew McAfee makes the case that generative AI is not only a game-changing general-purpose technology but could also spur change far more quickly than preceding innovations due to its accessibility and ease of diffusion.
Generative AI is a force multiplier. This is espeically true when it comes to economic productivity. We are dealing with units of cognition that are generated by these models. As they expand, we are looking at it affecting a wide range of industries.
There is no one sector that is specifically impacted. They all are.
Consider what the gains in productivity resulted due to the printing press, automobile, and electricity. Entire industries sprung up utilizes those technologies at their core.
Thus, we have every industry presently operating that will be affected along with a host of new ones that will form over the next couple decades.
Going back to the idea that everything (non-biological) that is moving will be autonomous, focus upon the outcomes there. We already see some surgeries being performed solely by machines. Manufacturing was moving in this direction for the last 30 years. It will eventually penetrate construction. Transportation, in all its forms, will be autonomous. People focus upoin autmobiles but think about rockets. Most of those are launched without humans.
For years I wrote about the Age of Abundance. This is another way of framing the economic singularity idea. When both brain power and brawn are replaced by artifical means, i.e. AI and robots, we are dealing with a completely new economy.
Generative AI is going to change society completely. This will be bigger than the smartphone, cable television, and satellites.
For those involved in cryptocurrency, this is a positive since, as I will show in my next article, the two are linked.