Is AI Overhyped? Is AI a Bubble? (New Models Don't "Feel" That Much Better, Why?)

In this episode, we delve into the current state of AI and discuss whether it's merely hype or a transformative force in society. The conversation touches on the economic impacts of AI, its advancements in fields like genetics and drug development, and how it's being adopted across various industries. The episode also addresses some criticisms and misconceptions about AI's capabilities and market value. Discussions include insights from industry leaders, practical applications, and the potential for AI to reshape the economy and everyday life.

Malcolm Collins: [00:00:00] Hello Simone. I'm excited to be talking to you today. Today we are going to be talking about whether AI is hype, whether AI is plateauing, whether AI is over. And by this what I mean because you know, I, I had a, the head of our development team, Bruno, who comments a lot on the discord and the comments here.

So fans of the show will know him. He sent me an email that we're gonna go over as part of this sort of being like, okay, so here's some evidence that AI doesn't seem to be making the systems level changes in society that you had predicted it would make in the past, and that many other people are predicting it will make.

And when I, and we're seeing other people say this, when I go out and I interact with AI today. I really struggle to see how having this thing I can chat with, is that useful? It may be fun as like a chat bot or something like that. But I don't see its wider utility yet. Now we'll be going into the arguments around this because I think that there are some strong arguments, like the AI industry is making almost no money [00:01:00] right now.

You know, is this industry not, not almost, but almost no win contracted with the investment that's going into it. Right? And, and the amount that we talk about it and other people talk about it is matter mattering. And then you've gotta think about all of this in the context of Yeah, but like 80 thou, well, oh, sorry.

Around 90,000 people just in the US tech sector had their jobs cut due to AI this year. You know, like, yeah. So come on. Do, did not matter to them. Yeah. But, but so what we're going to be seeing here is, I think the way that the people are looking at AI and expecting AI to transform the economy is different from the way it actually is.

They're looking at how AI is useful to them instead of how AI will replace them. I'd also note here I. To the question because Sam Altman, you know, literally like Sam Altman one of the, the guy who runs one of the largest AI companies has said AI is a bubble right now. Right. And so people will come to me and they'll be like, well, you know, even he's saying it's a bubble.

And I'm like, I would say it's a [00:02:00] bubble right now. It is a

Simone Collins: bubble. It's obviously a bubble. He's a bubble right

Malcolm Collins: now. But the fact that a thing is a bubble doesn't mean it's not gonna transform society. Exactly. So like if you go to, the.com boom, right? Like the.com boom was a bubble, right? But the internet still transformed society.

The companies at the beginning of the.com boom, you know, like they were formed in the middle, like Amazon and Google and stuff like that. Like if you made the right bets on those companies, if, if anything, what? Like, if you wanted to make the best bets possible, wait for the AI bust and then invest in whatever survives.

If there is a traditional bust, you know, keep in mind like what, what I mean by a boom now is a lot of people are investing in AI companies without understanding in the same way, like in the early.com boom, what the internet's actually good for and good at.

Simone Collins: Well, what kind of sucks is, is also the AI companies that I think are coming outta this.

They're not gonna be hopefully traded a big shift in ai. Tech booms, as far as [00:03:00] I see, is that they're not something you're gonna see in a stock market. They're small, they don't have a lot of staff, they're not public. So our ability to participate in the upside is severely limited.

Malcolm Collins: Well, the other thing about AI development and, and you can, you know, back me on this, is we can see all these metrics that say that AI is supposedly getting better and smarter.

And yet when you consider like the latest model of grok versus the last model of gr, you don't, you don't go like. This is like 50% better. Like it doesn't feel that way to you. Same with open AI's model. Same with a lot of these models. You, you interact with the most cutting edge thing and you're like, this is marginally like three or 4% better.

But all the metrics are showing that it's like massively better. So is this a problem? And how we develop ai, how we measure ai, everything like that. I'm gonna be talking about that in this as well. I'm also gonna be talking about the study that Facebook put out saying that you can't get, basically they're saying AI really isn't that smart.

No, no, sorry, not Facebook. I wanna say Apple maybe put this out. But if it was Apple, it, it shows why Apple has not [00:04:00] developed anything good in the AI space because the people they have working on it are just not that bright.

Simone Collins: I do have to say though, I'm really excited about their smart house play.

I think that if they're, they're gonna have any win, them being the ones that make everything that's AI in your smart home connected and work seamlessly and be really pretty, that they are gonna be the ones that are capable of pulling that off.

Malcolm Collins: So we're gonna go into an article. Start, start by going into an article in Future Magazine.

Nice. So you can see that this isn't just Bruno making these scientific claims. And the article was titled scientists are Getting Seriously Worried that they've Already Hit Peak AI Speaking to The New Yorker, Gary Marcus, a neuroscientist and longtime critic of Open AI said what many have been coming to suspect despite many years of development at a staggering cost.

AI doesn't seem to be getting much better throughout gp, though GPT technically performs better on AI industry benchmarks and already unreliable measure of project. As experts have argued, the critic argues that it's used beyond anything other than virtual chat Buddy [00:05:00] remains unlikely. Worse yet, the rate at which new models are growing against the dubious benchmarks appears to be slowing down.

I don't hear a lot of companies using AI saying 2025 models are a lot more useful to them than the 20, 24 models, even though the 2025 models perform better on a bunch of benchmarks. Marcus told the magazine now here, I'd note here when he's like, I don't see AI being used for anything other than one of the things we're gonna get into later in this episode as, as a chat bot, I'm gonna be like, well then it's just because you're not familiar with any industry other than your own.

AI has already invented drugs that are going through the production cycle that are likely to save millions of lives and, and not just like one drug, like countless drugs at this point. Yeah. AI models that are trained on the human genome have already made numerous genetic discoveries. It's the way that you're using AI and we'll go through these discoveries in a bit.

It almost to me feels like with some of these people, like that money, python sketch you know, like, what have the Romans [00:06:00] ever done for us? What has AI ever done for us? And it's like, well, okay, yes, they invent lots of drugs and yes, they help with drug discovery and yes, they help with

Speaker: But apart from the sanitation, the aqueduct and the roads, irrigation medicine, education. Yeah. You alright? Fair enough. And