Examining the Overhyped Reality of Generative AI: What’s Ahead in 2024?

Usama AnjumLast Updated: Oct 11, 2023

Is generative AI going to face a decline in the near future? Well, CCS Insight’s annual predictions suggest a forthcoming reality check for the generative artificial intelligence field in 2024. This projection is based on diminishing hype, increased operational costs, and mounting demands for regulation. The AI sector, once a source of great promise and controversy, is likely to encounter challenges in the near future.

The major forecast that CCS Insight has for 2024 is that generative AI “gets a cold shower in 2024” as the reality of the cost, risk, and complexity involved “replaces the hype” surrounding the technology.

“The bottom line is, right now, everyone’s talking generative AI, including Google, Amazon, Qualcomm, Meta,” Ben Wood, chief analyst at CCS Insight, told CNBC.

“We are big advocates for AI, we think that it’s going to have a huge impact on the economy, we think it’s going to have big impacts on society at large, we think it’s great for productivity,” Wood said. “But the hype around generative AI in 2023 has just been so immense, that we think it’s overhyped, and there’s lots of obstacles that need to get through to bring it to market.”

Generative AI models like OpenAI’s ChatGPT, Google Bard, Anthropic’s Claude, and Synthesia leverage substantial computational resources to execute intricate mathematical models. These models enable them to generate responses to user prompts effectively.

Companies need high-performance chips to support AI applications, frequently relying on advanced graphics processing units (GPUs) from leading U.S. semiconductor manufacturer Nvidia. However, a growing number of companies, including Amazon, Google, Alibaba, Meta, and purportedly OpenAI, are developing their custom AI chips tailored for running AI workloads.

“Just the cost of deploying and sustaining generative AI is immense,” Wood said. “And it’s all very well for these massive companies to be doing it. But for many organizations, many developers, it’s just going to become too expensive.”

CCS Insight’s analysts anticipate that AI regulation within the European Union, which typically leads in technology legislation, can also cause impediments to generative AI. The EU is expected to be the initial adopter of AI-specific regulations, but the rapid progress in AI is likely to necessitate multiple revisions and updates to these regulations.