$500mn+ flushed down the drain
The search for the Theranos of AI continues.
For example, I work in healthcare and its difficult to over-exaggerate how much time it can take to do the most basic things. The people that are tasked with doing those basic things are often highly-educated, highly-skilled, and highly-paid; and it still takes a long time.
I suspect there is an unreasonable amount of cost to shed from doing simple things. Things like:
1. Reading, reasoning over, and copying structured data from lightly-structured, highly variable documents like PDFs.
2. Reducing the amount of time a human sits on hold on the phone. I'm of the opinion the AI doesn't even need to do the talking to deliver huge amounts of value. Just help me help my highly-skilled employees move from high-value task to high-value task without the tedium in the middle.
3. Login and copy basic details from any of the 1000s of healthcare specific websites, each of which does more or less the same thing, slightly differently. RPA has always been so costly to build and maintain. The high variation fan-out just got a lot easier.
In the short term, I'm most bullish on AI to solve these low-value, highly-variable, highly-annoying tasks. I'm also reasonably confident that the AI we have today is already good enough to do it.
Give it time and we'll start to see companies operate at margins that were previously impossible in industries that we thought were near-impossible to make more productive.
(Maybe a bit less than what you described. It's something I tried and I don't think LLMs can deal with most unstructured data at scale very well.)
Its that, as an industry or business at macro level, it is OBSCENELY overvalued.
Generative AI may be a 50bn business. Or a 25bn, or 75bn.
What it definitely isn't, is a multi-trillion doller game changer thats going to revolutionize the world in ways unheard of; and yet, that seems to be how it is being presented and, more importantly, pitched to VCs and hyperscalers.
I acknowledge your bear case and hear the possibility that it's all hype and the aggregate value of all generative AI (measured in dollars) will be worth less than e.g. the market capitalization of a single company like Uber.
BUT, hear me out. Forgive me, as I fallback to healthcare... The US spent ~$4.9 trillion on healthcare in 2023 alone (according to CMS). That cost is spread out across a lot of things, some of which is work that things like AI can help make more productive, some of which is not applicable to AI. When we are spending nearly ~$5 trillion dollars a year, it does not take a lot on a percentage basis to start seeing really significant dollar values in savings.
It's a story of death by 1000 cuts. I suspect it won't be a big magical fix all at once where AI magically solves healthcare. But we will optimize 1% here and 1% there using focused solutions that actually solve pain points. If someone improves productivity in healthcare by even just 1%, one-time, then we are talking about savings of ~50bn per year.
frereubu•8mo ago