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I've Always Wondered ...

Why are we hearing so much about AI all of a sudden?

Janet Nguyen Oct 13, 2023
Marco Bertorello/AFP via Getty Images

This is just one of the stories from our “I’ve Always Wondered” series, where we tackle all of your questions about the world of business, no matter how big or small. Ever wondered if recycling is worth it? Or how store brands stack up against name brands? Check out more from the series here.

Listener Cathy Johnson from Providence, Rhode Island, asks: 

I’ve always wondered how multiple companies decide to follow a tech trend all at once. I’m an artist, and in the past few years, we’ve seen trusted companies jump onto trends like crypto, blockchain technology, NFTs, and now suddenly AI, all at once. 

Over the past year, the public hasn’t been able to escape the term “AI.” The concept of artificial intelligence has been around for thousands of years; the first AI program was written in 1955. But since 2022, we’ve seen a proliferation of AI tools, including ChatGPT (a chatbot that users can converse with) and Dall-E (a program that converts text to images). 

As Johnson pointed out, other digital- or tech-based products have exploded in popularity, seizing public attention in a short time. In the last few years, digital illustrations known as non-fungible tokens, or NFTs, have inundated the art world, some selling for tens of millions of dollars. Meanwhile, cryptocurrency ads have flooded the airwaves

While it may seem like the boom in popularity for these tech products happened overnight, experts say that big companies often observe or invest in innovations years before they become widely known. 

The seed of investment

Venture capital firms invest in budding technology, then host “innovation tours” for companies to learn about the technology, explained Eric Koester, an adjunct professor at Georgetown University’s McDonough School of Business. 

Koester, who’s also an entrepreneur and author, recalls how one VC firm brought in a bunch of big companies (think Fortune 500) to meet its portfolio companies and see and use the technology. 

“And the reason that they do that is for two reasons. One, venture capital firms want their portfolio companies to get bought by big companies. And two, they want to show them what’s coming so that they can sort of see what companies to maybe partner with,” Koester said. “So there’s actually a real process that goes on. And it starts with venture capital firms starting to identify things.” 

Microsoft first invested in OpenAI, the developer of ChatGPT, four years ago, noted Melanie Subin, the managing director for Future Today Institute, a consulting firm. 

“When it feels like companies have jumped on a bandwagon, it’s likely that that company has been investing in that technology or that trend for much longer than the public was aware of it,” Subin said. 

Why did Microsoft think AI was so promising in 2019? 

“I think that one of the key catalysts is really just technological capabilities,” Subin said. “So for example, how much computing power we were able to extract from hardware; how capable the chips that we have are; connectivity infrastructure that enables us to store data on the cloud at a volume that we weren’t able to in the past. All of these are things that are really enabling artificial intelligence to scale in the way that we’re seeing it scale today.” 

But she noted that AI was likely on Microsoft’s radar even before 2019. Some companies are likely aware of certain technologies and observing them, but are waiting until the right time to become involved, she said. 

“Companies have been watching blockchain and its potential applications probably since around 2010 or 2011. But at that time, the use cases weren’t clear, and so companies weren’t ready to invest in or ready to roll out a product,” she said. For example, businesses may have waited until marketplaces for NFTs, like OpenSea, expanded before investing in the technology.  

What makes a trend? Look to the seven deadly sins 

Koester said it’s difficult to predict what technology is going to become a consumer trend. 

“It really comes down to who likes it, who was influenced by it, you just never quite know,” he said. 

But Koester once worked at a venture capital firm where they used the seven deadly sins as a barometer for trend potential.

For example, “sloth” is a seven deadly sin. Or laziness, in other words, Koester said. And so you can apply it to AI in the sense that it helps people execute tasks without much effort. There’s also “greed,” and AI can help people make money, he added. 

But recent cryptocurrency company bankruptcies have shown that companies and people need to be cautious about promoting new technologies to vulnerable consumers. 

The cryptocurrency exchange FTX filed for bankruptcy in 2022 after former CEO Sam Bankman-Fried was charged with using customer funds “for his personal benefit.” Several celebrities, including Tom Brady and Larry David, had endorsed FTX. 

While AI can help companies by saving money and performing monotonous or dangerous tasks, it’s also replacing some workers.

Artists have raised concerns about the use of AI art generators like Dall-E and Midjourney. Molly Crabapple, whose illustrated journalism has been featured in Vice and The New York Times, told Marketplace in an interview that these generators can mimic styles that artists have spent their whole lives developing, and that big companies are using them because “they’re just impossibly cheap and fast.”

AI use was a major point of contention between studios and writers in their recent strike, and actors have yet to reach an agreement with studios in a similar dispute.

The Screen Actors Guild-American Federation of Television and Radio Artists, which went on strike in July, is calling for protections that would ensure artists give consent before their likeness is used or that they are compensated for it. (Marketplace is represented by SAG-AFTRA under a different contract.) 

The Writers Guild of America, which recently ended a nearly five-month strike, approved an agreement with the Alliance of Motion Picture and Television Producers that will include safeguards for writers. “AI can’t write or rewrite literary material,” nor can companies force writers to use AI software, among other stipulations, according to a summary of the contract from the WGA. 

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