Hallucinations in AI

Today, AI hallucinations propel hyperbolic narratives around foundation model FUD, open source outperformance, incumbent invincibility, investor infatuation, and doomer declarations.

During the early internet era of the mid-90s – and crypto in the early 2010s – very few people showed up in the first few years, but almost all of them made money.

AI seems like the inverse. After the ChatGPT launch, everyone has shown up to participate in the AI game: researchers, developers, VCs, startups. But unlike former technological shifts, it is possible that very few new players stand to win in the deployment era of LLMs. Unlike crypto, the value prop of LLMs is immediately obvious, driving rapid demand; unlike the internet, LLM products leverage cheap ubiquitous computing to deploy quickly. The few AI players in pole position are winning at lightning speed.

Because the AI revolution is so unevenly distributed, there are very few people defining the frontier – this unfortunately means that the rest of the technology industry is some combination of uninformed and biased. Most talkers are playing catch-up, hallucinating a self-serving worldview that’s a mix of despondence (mope), denial (cope), and salesmanship (hope).

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