Foreign The earnings call of almost any big tech company and there's one word you'll hear more than anything else. AI According to Bloomberg, the number of times company Executives mention AI has exploded in 2023, Google Facebook and Microsoft each mentioned AI over 50 times during their first quarter earnings calls far more than they did in 2022. It shouldn't come as a surprise since the release of Chat GPT in November of 2022, generative AI in large language models have taken over the tech world as the next generational technology. Earlier this year, the news site BuzzFeed announced they would leverage Chat GPT to help it create content.

The idea was that since the AI can create human-like content, BuzzFeed could save tons of money by using computers rather than humans to write its articles. Its popular BuzzFeed quizzes and more, but has the hype gotten ahead of itself. while using AI has allowed BuzzFeed to lay off dozens of writers, The auto-generated content is, as you might expect, of much lower quality. Most of it isn't worth reading.

In another case, a lawyer use Chat GPT to help rate his legal arguments, but the AI produced fake information that only got exposed when the lawyer tried to use it in the courtroom. At the same time, investors are pouring billions of dollars into the new technology and AI related stocks like Nvidia are skyrocketing. So is this amazing new technology the real deal? or is it the most overhyped thing to come out of? Silicon Valley Since the.com Bubble as you may or may not know, learning Spanish has been one of my lifelong goals, but for the longest time, I've procrastinated. Even starting learning an entire new language is an intimidating task and it can be difficult to even know where to begin.

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On top of that, any purchase is risk-free with Babel's 20-day money-back guarantee. Thank you! AI Hype started on November 30th, 2022 with the release of Chat GPT It almost immediately took over the tech world for its uncanny ability to write text responses that at least superficially look like they're written by a human. Stories cropped up all around the Internet with people sharing amazing things they were able to do with the new AI Chat Bot. It was revolutionary how a computer could respond to your text prompts, answer questions on any mainstream topic, and even create text or computer code in response to a prompt.

And that hype only grew over the next several months. A Silicon Valley was the first to realize that systems like Chat Gbt in the large language models that power them could be the next generational opportunity. Huge numbers of startups claiming to use generative AI for Creative applications attracted billions of dollars in Venture Capital funding according to data from Pitchbook Investment in Generative AI by Venture Capital companies surged in the first quarter of 2023 to over 10 billion dollars even in a tight financing environment due to the interest rate hikes by the FED Investors not want to miss out on this brand new technology that was so unlike anything else they'd ever seen. But where Chat GPT made the biggest waves was with the heavyweight incumbents particularly Google It's been reported that Chat Gbt sent Google senior leadership into a code red situation and they forced out their own homegrown competitor in just three months following chat.

GPT. By all accounts, the release was a flop, the likes of which Google had not suffered in many years. CEO Sundar Pichai and his colleagues looked like they were unprepared, the presentation felt rushed, and Google's version of Chat Gbt produced an embarrassing, incorrect answer to one of the questions they asked it. The rollout was negatively received by investors who sold off the stock almost 10 percent that same week, and even Google's own employees criticized the company for botching the rollout.

When a shiny new technology forces the hand of one of the world's most valuable and Powerful companies and sends its market value cratering by over a hundred billion dollars, you know it means business foreign. T's release. There was a flurry of energy around building it into various applications. Among recent startups, funded by Y Combinator, one of the biggest early stage Tech startup accelerators, there were at least four startups built on Chat GPT Some of them made more sense than others.

For example, one of the more creative ones was Baselit, which essentially built a way to use English prompts to help analyze data in a database. It uses Chad Gbt's AI models to understand what you want to learn from a database. Then it writes the code to query the database for you and reports the result. Something like this could potentially be useful in business analytics for data analysts who don't know how to write basic database queries and don't have access to pre-built user interfaces to their databases.

but most of the other startups seem to be not much more than just chat. Bots with a new name for example, Yuma uses Chat GPT to create an AI chat bot for customer support. That's basically all it is berry. AI is a tool that lets companies set up Chat Gbt chatbot for their employees.

It doesn't actually create any new functionality using the AI It's more of an infrastructure for companies to set up their own. Chad GPT use cases and the pricing is reportedly set at a whopping one thousand dollars per month. One of the biggest problems with Generative AI is that although most of the outputs are impressive and sound human, the accuracy of their responses are not reliable. This was put on full display in a recent court case in which a lawyer used Chat Gbt to help do legal research.

He wrote a briefing for the plaintiff, his client, citing numerous legal presidents. The defense team responded by saying that these precedents were completely bogus and in fact did not exist. As it turns out, Chat GPT completely made up those cases and the lawyer just assumed they were real even when asking chat. GPT to provide references for the made-up cases It produced references that were themselves made up naturally the judge was Furious and the lawyer has said he deeply regrets ever touching chat.

GPT Despite this embarrassing incident, there are several startups trying to create tools to help lawyers write their court cases. for example, site.ai seems to do pretty much the same thing that the lawyer did. Another startup called Spellbook uses Chat, Gbt and similar large language models to help write legal documents and they proudly display the fact that they raised 11 million dollars from Thompson Reuters to build the product. I'm not a lawyer, but if I was writing an important legal document for a client or a court case, I wouldn't try to cut Corners with a computerized assistant I Just take the time and do my job myself.

foreign with AI being harder to find real world use cases for than perhaps originally imagined and the reliability of it being so suspect, any company leveraged to the AI hype is at risk. Not the least of which is NVIDIA As the maker of the computer chips that the generative AI models run on, the AI Hype has been a huge Boon for its business. Its stock price has quadrupled since the release of Chat Gbt. Institutional and individual investors alike understood that any company that wanted anything to do with generated AI had to use Nvidia's graphics cards alphabet Oracle Microsoft Amazon Meta All understood that if you use Nvidia ships, you can speak in the vernacular of Chachi BT or any of the artificial intelligence languages that are being developed I say, speak in the vernacular because that's what Generative AI literally does.

If you have enough Nvidia cards put together, you can enable all this incredible artificial intelligence stuff that everybody's so excited about doing now. Best of all, there is absolutely zero competition. none. I've never seen anything like it.

Nvidia now trades at an enormous 1.1 1 trillion dollar valuation that's on quarterly revenue of just seven billion dollars in net income of two billion dollars. Trading at well over 100 times earnings implies great expectations for growth in the coming quarters. and Nvidia is priced for Perfection Nvidia's deep valuation on the back of a wave of AI hype is reminiscent of Cisco the networking equipment maker during the.com bubble. Cisco itself made real products that had real value and generated real profits, but its stock was a major beneficiary over the hype around Allthings.com Its stocks surged six thousand percent in the Years leading up to the crash, and to this day has never retaken those highs.

Nvidia seems to be in a situation similar to Cisco It does make real products that do real things, but even if Generative AI does turn out to be a generational new technology like the Internet proved to be 20 years ago, it may not be enough to support its nosebleed valuation. but Nvidia isn't the only one benefiting from the hype of generative. AI The city of San Francisco one of the hardest hit American cities during the pandemic is all in on AI bringing business and thus tax revenue back into the city. The hope that Generative AI which we spent so much time talking about the hope that that will be the next tech boom which is already happening San Francisco is now home to 20 of the best funded AI companies more than the rest of America combined Mayor breed Not surprisingly Embraces that but two.

How does she make sure that those companies stay here? and that other larger, more taxable tax Tech businesses don't desert the city as the country's hot bit of technology. and Innovation It's perhaps unsurprising that San Francisco would expect AI to disproportionately benefit the city. And if Goldman Sachs is correct, investment in AI will continue to accelerate into the later parts of this decade. Venture capitalist firms have Deep Pockets and a never-ending desire to invest in the trends of the moment.

Foreign, but what if Generative AI doesn't live up to the hype? What if it takes more than just a few years for researchers and entrepreneurs to figure out how to extract billions of dollars of value with the internet? It was immediately pretty clear how it could fundamentally change how almost all parts of the economy work. Communication became instant. Buying and selling suddenly became far more efficient. Marketing became instantly more effective.

There was a clear path for almost any company to leverage the Internet to unlock significant value, but with Generative AI there have yet to be very many concrete examples of how it could fundamentally change any industry. We've already seen how an unfortunate lawyer destroyed his own career by trying to use it, and there are very real concerns about the potential for Bad actors to use AI to harm. Society The number of incidents and controversies related to AI is growing exponentially and over a third of AI researchers say that they think at some point AI will pose the risk of nuclear level catastrophe. We're not saying that AI isn't here to stay or that it's going to be the end of mankind.

We aren't even saying that it won't be a benefit to the economy and productivity at some point in the future, but expectations today are: Sky High The risks are real and so far extracting real value out of it is proving. Harder Than People Realize all right guys, that wraps it up for this video. What do you think about Chat, Gbt and generative? AI Do you think it's been over hyped or not hyped enough? Let us know in the comments section. Below In the meantime, thank you so much for watching and we'll see you in the next one.

Wall Street Millennial Signing out.