For all its enormous potential, the field of artificial intelligence has been a backwater in the investment world. There are companies that have jumped on the AI wave in big ways: Google claims to have refined many of its services with the help of AI, machine learning has boosted sales of Nvidia’s graphics processing units, and it’s said that TikTok’s algorithm is a big part of what keeps users going. going back to your short videos.
But it’s hard to find a pure AI company that has grown thanks to the technology, or to identify a big new market that has been created. That image may be about to change, and in a big way.
According to Pat Grady, a partner at Sequoia Capital, something significant has happened in AI in recent weeks. Generative systems, which automatically produce text and images from simple text prompts, have advanced to a level where they could have a wide range of commercial uses. A partner at another leading Silicon Valley venture capital firm, who describes AI’s recent history as a graveyard for emerging investors, also reports that he has started the race to find innovative applications for this new technology.
Since the release of OpenAI GPT3 text-writing system two years ago, generative models like this have been all the rage in AI. The ethical issues they raise are deep, ranging from any bias they may absorb from the data they are trained on to the risk that it could be used to spread misinformation. But that hasn’t stopped the search for practical uses.
Three things have changed to turn these clever party trick systems into potentially useful tools.
One is that AI systems have moved beyond text. Last week Meta sleepless the first system capable of producing a video from a text or image message. That breakthrough was thought to be two years or more away. Not to be outdone, Google responded with no. a but two Proprietary AI video systems.
The biggest AI advance this year was in imaging, thanks to systems like OpenAI’s Dall-E 2, Google Image, and startup Midjourney. Emad Mostaque, the London hedge fund manager behind Stable Diffusion, the latest imaging system to take the AI world by storm For the storm, claims that images will be the “killer app” for this new form of AI. For the generation that grew up with TikTok and Snapchat, this new creative tool could be profound, he says. It also presents an obvious threat to anyone whose livelihood is based on creating images in other ways.
The second big change comes from the rapidly falling cost of training giant AI models. Microsoft’s $1 billion backing of OpenAI three years ago highlighted the prohibitive cost of this for ever larger models. New techniques that allow high-quality results to be achieved by training neural networks with fewer layers of artificial neurons are changing the landscape. The computing resources used to train Stable Diffusion would have cost only $600,000 at market prices, according to mostache.
The third change has been the availability of technology. Google and OpenAI have been cautious about making their technology widely available, in part due to concerns about potential misuse. In contrast, Midjourney’s imaging system is available to all users through a freemium pricing model. Stable Diffusion has gone further, opening up their software and publishing details of how they trained their system. That makes it possible for other organizations to train an image model on their own datasets.
The risks stemming from such generative systems have received much attention. They produce new images or text based on the millions of examples they have learned from, without understanding the underlying material. That can lead to meaningless results as well as deliberate misinformation.
But in a business environment, at least some of these shortcomings could be controlled. The trick will be finding ways to integrate the technology into existing work processes, creating tools that can suggest new ideas or speed up creative output, with human workers filtering the output. The idea is getting used to generate computer code.
The big question now, says one investor, is: Will existing giants in industries like marketing, media and entertainment be the first to make use of these powerful new creative tools? Or will they be interrupted by a new generation of upstarts with their roots in AI?