Is AI Winter coming again?

The first AI winter was because of a book about Perceptrons, was perceived as being extremely critical of them, which killed interest. It took decades for neural nets to finally prove their effectiveness.

The second was because the benefits of "Expert Systems" were oversold, and didn't prove to be as beneficial as expected.

There will be a heavy correction in the market caps of companies that bet heavy on AI, as the promises don't live up to the hype. However, in this case, there clearly is benefit to using LLMs, the cost of training has proven to be prohibitive. Slower and more prudent approaches, with better hardware will allow progress to continue. If nothing else, it'll be a mild AI winter.

> AI startups aren't getting funding

Corollary: 99% of AI startups are not providing real customer value and do not deserve to get funding on merit.

AI tools and LLMs have been overfunded. A few are able to stand out, but many aren't able to catch up with the likes of OpenAI.

Image, video, music, speech aren't fully solved yet, and new models are still competing with giants like Imagen and Midjourney.

The startups that build on AI can still be heavily funded. Most likely you aren't going to see many AI startups like character.ai. They'll be things made possible with AI.

Uber wasn't an app company nor a cloud company, it's a company made possible by the two. Reddit and FB/Meta didn't need mobile apps, but it certainly increased engagement.

To be honest I wish the Attention paper never came out.

All of this AI/LLM stuff is exasperating. I don't think I can stomach to hear another MBA talk about "leveraging AI" in their next startup/product initiative.

Cool, better autocomplete in my IDE is handy. But that's about it. I'd trade that back in a heart beat if I didn't have to have awful chatbots shoved in my face every time I open a webpage.

Retirement has never felt so far away.

Unless there is another jump in quality in the next GPT-5, we have plateaued. There is still time as there has been a significant jump between GTP-3.5 and GPT-4. I'd say we have at max one year to find out. The fact that OpenAI keeps releasing new products means they are quite pressured by market forces to demonstrate interpolation as investors are anxious about the billions being burned on compute.

So in a nutshell, it'll boil down to the next year or so.

Regarding people who say that GPT-4 increase productivity and whatnot. That's not the point, GPT-4/Claude3.5 do increase productivity and I use them daily and frequently. The question is whether that productivity increase will match the investments made. And investors have poured too much into AI.

Winter is seasonal and localized. There will be a winter but it will not be everywhere. There's a lot of folks building AI companies with no path to useful product or profit. It's just the next hot things, there's likewise been quite a number of investors that didn't want to miss the train so they hopped into whatever train they could irrespective of the destination. There will be a moment of reckoning.

With that said, generative AI has proved to be very useful and we have absolutely no idea what the limits are, there' a lot to be built and in that manner, things will be good for quite a while. It might be that as the very first useful ideas introduce useful ideas, the companies that are currently lost will gain ideas and pivot their way to usefulness and profit. Or perhaps there will be enough useful companies to drown out the lost ones.

With that said, plenty startups will die and plenty will succeed. It doesn't matter, just figure out a way to contribute positively and be part of those that will survive.

AI Winter reasons:

Funding is lost due to unmet promises ● Lighthill Report 1973 shuts down funding in UK ● Dreyfus at MIT argues lots of human reasoning is not based on logic rules, involving instinct and unconscious reasoning ○ (No AI researcher will eat lunch with Dreyfus for the next decade) ● Sussman: “using precise language to describe essentially imprecise concepts doesn't make them any more precise.”

> I know that the first AI winter started by not getting enough funding.

Well.. not quite. The funding was government funding. The opponents got behind things like the lighthill report [1] and had the government funding cut.

IMNSHO this was the right thing to do. The claims were overblown and it was wasting national funds in research. But it was pretty political. People stopped talking to each other for decades. I was a 12 year old in this time, My dad was in the trenches in the opposition to AI funding camp so that's my bias. Nothing which has come since makes me re-consider this, I might say that modern-day private capital JV/VC funding has been a bit silly, but in the end it's private funds so it's their call.

[1] Lighthill, James (1973). "Artificial Intelligence: A General Survey" http://www.chilton-computing.org.uk/inf/literature/reports/l...

As the founder of AI2sql https://ai2sql.io/ , a bootstrapped AI startup that’s reached $9K MRR, I can say that while funding can be more challenging for some AI startups, it's not necessarily an indicator of another AI winter. Many startups are finding success by focusing on real-world problems and building sustainable revenue models without heavy reliance on external funding. The key is creating value and staying adaptable to the market. AI still has immense potential, and I believe those that solve specific pain points will continue to thrive, regardless of funding trends.

The only thing that could cause an AI winter at this point is a thermonuclear war.

Just the release of o1 hasn't been fully appreciated yet. And in the next few months and year ahead we are getting a deluge of new SOTA models that will completely change the assumptions of what AI can do.

A lot of the AI startups are just cash-grab wrappers with little understanding of fundamentals under the hood. Their failure isn't reflective of the massive gains in AI and track to AGI in the next few years.

Not a winter, but a correction akin to crypto a couple years ago.

Big Tech is still pouring billions into AI. We're seeing real-world applications and breakthroughs. It's just harder for the "we'll sprinkle some AI on it" startups to get funded.

Investors are looking for solid business models and actual problems solved, not just hype. The wheat's being separated from the chaff. Probably healthy for the ecosystem long-term.

Remove startups from your thinking, it has nothing to do with what AI winter was. The only winter will be for those that do not use AI.

We were talking about the new AI winter coming 10 and 5 years ago. Advances keep coming that put it off. As far as I can tell, we keep getting further away from the next AI winter, but that could change in a decade or so.

Most of the AI startups also are shameless api proxies. I don’t see why funding or payments should go to yet another system prompt wrapper.

OpenAI is in hibernation now. If you look at OpenAI LLC articles of incorporation and address you will see them signaling this themselves. This is the hype cycle maneuvering.

Yes, LLMs are hitting a plateau and there's no new clear path to AGI or something close.

I heard someone say that we're at the AI version of 1996 during the dotcom boom.

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