Tech hype cycles are ramping up

Originally published on August 2023 and written by John White.

The summer has been busy for tech hype cycles. At the beginning of the month, the superconductivity of a new compound called LK-99 was creating a frenzy on Twitter, and its discovery was heralded as the breakthrough of a lifetime in the field of physics.

Desktop quantum computers, revolutionised efficiency of our global energy grid and making those levitation hoverboards from Back to the Future 2 a reality, were all potential futures associated with the discovery.

The researchers who discovered LK-99 were very confident in pushing the potential of the material and sharing videos of the potential levitation…

“For the first time in the world, we succeeded in synthesising the room-temperature superconductor working at ambient pressure…”

Sukbae Lee, Ji-Hoon Kim, and Young-Wan Kwon of Korea University

Why was this breakthrough potentially so important?

Superconductors are used in MRI machines, underpin advancements in quantum computers and are a critical component in making nuclear fusion a reality. However, their functionality is limited to extremely low temperatures or high pressures, which makes them impractical and costly for most everyday applications.

“A technologically viable room-temperature superconductor isn’t just Nobel Prize territory. If you’ve patented it, it’s of incalculable value essentially. It’s transformational on so many things.”

Chris Grovenor,
Professor of Materials at the University of Oxford,
Director of the Centre for Applied Superconductivity.

The LK-99 scientific paper was submitted by Sukbae Lee, Ji-Hoon Kim, and Young-Wan Kwon on July 22nd, but by August 7th, the claims were being debunked.

“With a great deal of sadness, we now believe that the game is over,” tweeted the University of Maryland’s Condensed Matter Theory Centre. “LK99 is NOT a superconductor, not even at room temperatures (or at very low temperatures). It is a very highly resistive, poor-quality material. Period. No point in fighting with the truth.”

This was followed by a now infamous article by Nature on August 16th that many believe was the final nail in the coffin for the discovery and sent South Korean superconductor stocks falling even further, as the previous weeks’ interest in LK-99 from investors disappeared.

Some say the discovery is just the beginning of a new path to reproducibility in superconductors, and LK-99 is just entering the Trough of Disillusionment every technology seems to go through on a typical tech hype cycle curve.

If it is, then it’s potentially the fastest we’ve ever seen, and that’s certainly the opinion of PR Week’s Camilla Tenn, who says the convergence of tech innovation is causing a noticeable acceleration in disruptive solutions…

“The Web3 news cycle was supplanted late last year by AI [thanks to ChatGPT], and now with Apple’s Vision Pro announcement, the AR/VR news cycle is now vying for pole position. How does the PR world keep up?”

Camilla Tenn,
PR Strategist at Eleven International

Self-driving cars go mainstream

In sharp contrast, August also provided evidence of technologies coming out of the hype cycle and into the “Plateau of Productivity,” where mainstream adoption starts to take off.

Regulators in California announced that self-driving cars manufactured by two companies, Waymo and Cruise, will be authorised to travel along roads in San Francisco as part of a robo-taxi service.

There will be no restrictions on the times of day when autonomous vehicles can operate. The driverless cars can pick up San Franciscans 24 hours a day / 7 days a week.

The decision by the California Public Utilities Commission (CPUC) is a major development for a technology that has been championed in some quarters for years.

“We’re incredibly grateful for this vote of confidence from the CPUC, and to the communities and riders who have supported our service. We can’t wait for more San Franciscans to experience the mobility, safety, sustainability and accessibility benefits of full autonomy for themselves — all at the touch of a button.”

Tekedra Mawakana,
co-CEO of Waymo

The decision to allow robo-taxis on the roads of San Francisco hasn’t received unanimous support, however. Although safety fears haven’t gone away completely, a bigger criticism seems to be around the potential for self-driving cars to block emergency vehicles. The San Francisco Fire Department recorded 66 such incidents between May 2022 and July this year.

But teething problems aside, the decision to allow Waymo and Cruise’s vehicles on the road 24 hours a day indicates that autonomous cars may be nearing mainstream adoption.

Mobility investor Reilly Brennan wrote in his Future of Transportation newsletter that the decision would be “the most significant regulatory moment for autonomous vehicles in the U.S. over the last/next 3 years.”

UBS analysts predict that Waymo’s revenue could reach $114 billion by 2030, and with Elon live-streaming 45 minutes of his personal Model S car using Tesla’s Full Self-Driving AI on the streets of California last week, self-driving cars are soon to become a new norm.

The breakthrough of ambient computing

“In 2017, the legendary tech journalist Walt Mossberg wrote in his final column that he felt that soon, one day, technology would become invisible and that the computer would disappear. We agree.”

Imran Chaudhri,
Founder of Humane

As part of Apple’s interface design team from 1998-2016, Imran worked on the Mac, iPod, iPhone, iPad and Apple Watch and is best known for his work on inventing the groundbreaking user interface and interactions on the iPhone.

In 2019, he and his wife, Bethany Bongiorno (former Director of Software Engineering at Apple, who was responsible for all software project management for iOS and macOS), co-founded the mysterious Humane.

In the space of just 4 years, Humane has raised over $230m from investors, including OpenAI’s Sam Altman, who joined the board saying “This is the first genuinely new computing platform I’ve seen since OpenAI…”

A few weeks ago, Techcrunch announced the imminent launch of its first product, The Humane AI Pin. Essentially, a connected and intelligent clothing-based wearable device that aims to replace many of the tasks usually performed on your smartphone.

During his recent TED talk, Chaudhri demonstrated AI Pin, a device that enables users to answer phone calls using a laser projection on their hands, provides audio responses to spoken questions, and offers real-time translations based on a speech model that mimics the user’s actual voice.

It provides all the power of artificial intelligence without the need for a screen, and while it may be early days for Humane, the company has already announced high-profile partnerships with the likes of Microsoft and Qualcomm. Could this herald the beginning of the ambient computing revolution?

Sam Altman’s portfolio – predictor of the future?

For investors, tech hype cycles present their own challenges. At its core, hype cycles are nothing more than a reflection of our human reaction to novelty. If you’re investing cash into startups at their peak hype, it means you’ll be investing at a higher valuation and securing less overall equity.

Knowing when to time your investment in any company, predicting when it is on the verge of mainstream adoption and then exiting at its peak so you maximise your returns is a fine art.

Bill Gurley, famed for leading Benchmark’s $17m Series A investment in WeWork and exiting with $676.5M just before its failed IPO, confirmed that hype cycles are basically essential to making venture capital work.

“Venture capital is inherently cyclical and it’s always going to be that way unless we fundamentally change the structure of the industry.

The reason VC outperforms other asset classes has to do with these tiny windows when you have a super “frothy” market and if you aren’t around for that part, it’s not that interesting an asset class.”

Bill Gurley,
Partner at Benchmark

In the aftermath of the initial LK-99 announcement, stocks in superconducting companies jumped exponentially. Yet, just as quickly, the majority of the gains were wiped away when doubts were raised about the material.

Someone who appears impervious to the challenge is OpenAI’s CEO, Sam Altman. He has invested in the above-mentioned, Humane and Cruise, plus his portfolio seems to be delivering at a remarkable rate.

His investments in Helion Energy, a nuclear fusion firm on a journey to eradicate the need for fossil fuels, continue to make huge strides year by year. He’s invested in Elon Musk’s AI brain implant firm Neuralink, which just recently raised a further $280m from Peter Thiel’s famous Founders Fund.

His personal $180m investment into Retro Biosciences, who are trying to extend human life by a minimum of 10 years through automating autophagy in humans, is entering into its first clinical trial this year.

“People always make the mistake of calling an idea small or stupid because they don’t understand how it’s going to evolve. I believe whatever smart, ambitious people are working on will be the trend of the future…”

Sam Altman,
CEO of OpenAI