The AI hype bubble is the new crypto hype bubble

🌈 Abstract

The article discusses the rise and fall of the "blockchain hype" and how it is being replaced by the current "AI hype". It examines the similarities between the two, highlighting how they are both examples of classic "pump-and-dump" schemes. The article also criticizes the exaggerated claims made by the proponents of these technologies and the lack of real-world impact. Additionally, it discusses the potential impact of AI-powered tools on creative industries and the need for a more nuanced understanding of these technologies.

🙋 Q&A

[01] The Rise and Fall of the Blockchain Hype

1. What was the story of the Long Island Iced Tea company's attempt to capitalize on the blockchain hype?

• In 2017, the Long Island Iced Tea company changed its name to "Long Blockchain Corp." (LBCC) and saw its shares surge by 400%, despite not having any actual blockchain integrations.
• LBCC was subsequently delisted from NASDAQ after settling with the SEC over fraudulent investor statements. Today, the company trades over the counter and its market cap has dropped from $138m to $36m.
• The author argues that LBCC was not the peak of the blockchain bubble, but rather the start of its final "pump-and-dump" phase.

2. How does the author compare the LBCC case to the more recent "superpredators" of the crypto bubble?

• The author states that the LBCC case was "small potatoes" compared to the more recent crypto grifters, who have deployed "the most powerful reality distortion fields since Pets.com."
• These "superpredators" have engaged in practices like NFTs, wash trades, ICOs, Superbowl ads, stealing billions from investors, and campaign finance frauds, which LBCC did not do.

3. What is the author's view on the "wealth" that was wiped out by the crypto bubble's bursting?

• The author argues that the "wealth" wiped out by the crypto bubble's bursting never existed in the first place, as it was just a way to separate "normies from their savings through the pretense that they were 'investing' in a vast enterprise."

[02] The Rise of the AI Hype

1. What are the author's criticisms of the current AI hype?

• The author argues that AI is a "solution in search of a problem" and has "all the hallmarks of a classic pump-and-dump."
• The author criticizes the terminology used to describe AI, stating that it is not "artificial" or "intelligent," and that "machine learning" does not actually learn.
• The author compares modern "conversational AI" to a "sophisticated form of autocomplete" and argues that it is prone to producing "stupid, wrong things with total confidence."

2. How does the author view the claims made by AI proponents about the technology's potential?

• The author is skeptical of claims that AI represents a "defining moment" like the internet in the 1990s, arguing that the AI bubble is being inflated by "massive incumbents" who want to "get much, much bigger" rather than enabling low barriers to entry.
• The author also criticizes the "criti-hype" around AI, where critics repeat the exaggerated claims of the technology's boosters without properly interrogating them.

3. What are the author's concerns about the potential impact of AI-powered tools on creative industries?

• The author discusses the economic impact of automation, noting that corporations are primarily interested in using these tools to "erode our wages" by replacing human workers.
• The author also raises concerns about the lack of established copyright over voiceprints, which could allow corporations to exploit the work of voice actors without proper compensation.