Did we go from a broad bubble to a gen AI bubble? What is the current state of AI and generative AI? What has been commoditized and what is still distinctive? What does the future hold?

Navigation:

1. Intro (01:34 )


2. The State of AI / gen AI


3. On the negative side


4. On the positive side


5. Our take


6. Conclusion

Our co-hosts:

• Bertrand Schmitt, Entrepreneur in Residence at Red River West, co-founder of App Annie / Data.ai, business angel, advisor to startups and VC funds, @bschmitt


• Nuno Goncalves Pedro, Investor, Managing Partner, Founder at Chamaeleon, @ngpedro

Our show: Tech DECIPHERED brings you the Entrepreneur and Investor views on Big Tech, VC and Start-up news, opinion pieces and research. We decipher their meaning, and add inside knowledge and context. Being nerds, we also discuss the latest gadgets and pop culture news

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Bertrand Schmitt

Welcome to Tech Deciphered, episode 57. This episode will be about generative AI, and we will be asking the question, “Are we in a generative AI bubble?”

Bertrand Schmitt

In our last episode, we talked about AI, what was the latest happening in terms of endpoints, PCs, Macs, iPhones, and is it a risk? Is it a benefit? Today, we’ll talk about what’s happening with GenAI. Is it overhyped? Is it too much investment? On the plus side, we’ll be wondering, okay, maybe it’s not a bubble after all, or even if it’s one, is it such an issue because basically is it laying the foundation for a new stage, a new scale of AI for an act two of generative AI. Good to talk to you today, Nuno.

Nuno Goncalves Pedro

Nice to talk to you as well, Bertrand. I’ll start with my answer. It is a bubble and it isn’t. I’ll come back to that. I’ll leave you guys on that cliffhanger. Let’s start maybe a little bit with where we are in the state of AI and GenAI. Are we at commodity level or not? Adoption levels that we’re seeing in the market. Interesting report from McKinsey. Some around the state of AI, they did over 1,300 interviews. It was really a survey format around AI and GenAI adoption.

Nuno Goncalves Pedro

Some, like the conclusions, increased adoption of AI in at least one business function. Over the last year, this dramatic increase. I’m not really sure. Everyone that said, yes, we’re using it is actually using it. I take that with a grain of salt. This is self-reported, again, and so everyone has to be using GenAI, but everyone’s aware of it. I’m sure there’s an increase in adoption for sure.

Nuno Goncalves Pedro

The second piece that I feel is a little bit more exciting is what are the functional areas of companies that are using AI and generative AI more actively? Maybe not super mega surprising marketing and sales, which is core to some companies, but relatively support function. A little bit surprising to me that people are seeing product in our service development as number two. Surprising to me that software engineering is so low. Again, maybe no software engineer has actually filled in anything around that. That’s why it’s so low or middle of the board, or they don’t know what their engineers are doing, really, which is also interesting.

Nuno Goncalves Pedro

Then very low on strategy and corporate finance were business analysis, triangulation of data, or using ChatGPT, et cetera, I would have taken a little bit for granted that people would be using it. A bit surprising on that. Just feel it’s an interesting… Again, self-reported, it’s a survey. Some interesting conclusions on both sides in terms of the functions, et cetera. Some the conclusions as well on the rapid ascendancy of generative AI.

Bertrand Schmitt

Yeah, for me, what I’m quite impressed, I must say, is how fast generative AI has picked up. I don’t think I remember any new technologies that move so fast in terms of adoption, because here we are already talking about adoption metrics. I mean, it moved from nowhere in 2022, 33% in 2023, 65% in 2024. Basically, as high as the adoption of AI, the general AI adoption took seven years to get there.

Bertrand Schmitt

Here it’s two years. I’m not sure I remember any technologies that move so fast in terms of adoption. It took years and years for smartphone to get there. It took 5, 10 years for cloud computing to get there. It’s really fast, I must say for me, is my first reaction.

Bertrand Schmitt

In terms of function, marketing, I’m not surprised. That’s where you can use generative AI to generate content relatively easily. It’s not mission-critical content, it’s content you can review. At the same time, it can give you some clear benefits in terms of moving pretty fast and needing less resources. I guess for some other function like software engineering, I think right now, I guess the biggest issue is that you cannot trust it. It’s not something that you are ready to deploy in production so quickly, very different from content for marketing.

Nuno Goncalves Pedro

Maybe perhaps a little bit more interesting is the article from Tomasz Tunguz from Redpoint. I hope he’s still at Redpoint, and I didn’t say anything wrong.

Bertrand Schmitt

I’m not sure, actually.

Nuno Goncalves Pedro

Around the evolution. He was at Redpoint.

Bertrand Schmitt

He was.

Nuno