The Peak of AI Inflated Expectations

Are we in a bubble?

Daniel Hunter
January 29, 2023

Think Week No. 1 – January 29th, 2023

Hi there 👋,

I’m Daniel Hunter, author of Think Week.

Every Sunday, I’ll help you discover your next favorite writer.

Let’s dive in.

Thinker

John Luttig (@absoluttig)

Is AI the new crypto?

Peak AI indicators abound. VC thought pieces and tweetstorms have reached all-time highs. Fair-weather fans from the crypto boom have migrated. MBAs may soon outnumber nerds. Just a year ago, crypto had comparable froth. Can AI avoid crypto’s bubble-bursting fate? Crypto provides a cautionary tale for excessive hype, with four critical flaws: (continue reading)

I had the joy of recently discovering John's work on Substack. He occasionally writes about what he's learning at Founders Fund and pairs this experience with his own personal deep dives outside of the firm.

I've scattered notes all over his latest article that I captured in Readwise Reader, and I guarantee you'll do the same.

Atomic Thought

I've seen countless comparisons of this AI hype cycle to where Crypto was not too long ago. I don't believe AI will crash and burn in a similar fashion. We are nowhere near the end, and maybe years away from a plateau of productivity.
— Daniel Hunter (@danielkhunter)
Jan 27, 2023

There's a fundamental difference between what attracted people to Crypto from 2020 - 2022, vs. what we’re seeing from AI in 2023.

Crypto was dominated by “get rich quick” culture. AI, on the other hand, is fueled by legit productivity enhancements.

We get value from AI without going bankless.

Because of this, John Luttig argues that even when AI does reach the plateau of productivity, it could be higher than the peak of inflated expectations.

John’s amended Gartner hype cycle chart. The plateau for AI could be higher than the peak of our current hype cycle.

Insight

VC firm, a16z, has invested a jaw-dropping $7.6 Billion in the crypto space and has lost a significant amount of the bag.

A16z's Largest Crypto Fund Loses 40% in First Half of 2022: Report

Andreessen Horowitz has slowed down its crypto investments, making just nine in the third quarter, compared with 26 in the fourth quarter of last year.

www.coindesk.com/business/2022/10/26/a16zs-largest-crypto-fund-loses-40-value-in-first-half-of-2022-report

Meanwhile, Microsoft’s $10 Billion investment in OpenAI could end up being the greatest deal they’ve ever made.

Writing Tip

The best writers master these 5 things:

Logical arguments
Narrative flow
Speaking to intent
Detailed research
Self-editing

— Source

Fin

Give yourself permission to be excited about AI.

Yes, It's a shiny new object, but that's ok.

Cheers,

— Daniel

P.S. The Idea Expander