The AI industry could experience a “cold shower” next year, according to an analyst firm. Getty Images
The analyst firm CCS Insight predicts a “cold shower” for generative AI in 2024.
The technology is overrated and causes immense deployment costs, said the chief analyst in an interview with the television station CNBC.
The company’s prediction comes amid fears of a global chip shortage.
This is a machine translation of an article from our US colleagues at Insider. It was automatically translated and checked by a real editor. We welcome feedback at the end of the article.
An analyst firm predicts a “cold shower” for generative AI in 2024. CCS Insight, a London-based tech analytics firm, believes that the very real challenges around the cost, risk and complexity of AI could soon overshadow the current hype surrounding the technology in 2024, reported CNBC on Tuesday.
“The hype around generative AI in 2023 has been so great that we believe it is overvalued and that there are many obstacles that must be overcome to bring it to market,” said Ben Wood, principal analyst at CCS Insight, to CNBC.
“The costs of deploying and maintaining generative AI alone are immense,” says Wood. He added that while large companies like Google and Meta can shoulder these costs, it would be too expensive for many organizations. AI relies on chips to function, and the company’s prediction comes amid concerns about a global chip shortage.
The importance of these chips has even sparked a global race for Nvidia’s semiconductor chips among industry giants – from Elon Musk to Chinese tech titans.
In response to rising demand, Nvidia, a $1.13 trillion (€1.06 trillion) chipmaker, announced in August that it would triple production of its $40,000 (€37,700) processor chips next year.
And the AI company OpenAI is now examining plans to produce its own chips, Reuters reported on Friday, citing recent internal discussions at the company.
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Dylan Patel, chief analyst at semiconductor research firm SemiAnalysis, estimates that the company burns up to $700,000 a day on the computing power needed to keep Chat GPT running.
CCS Insight did not immediately respond to a request for comment sent outside regular business hours.
Read the original article in English here.