Blog:Why All the Hype?

I learned several lessons during the 1990’s dotcom stock market bubble working at TD Ameritrade. I saw “hyped companies,” unprofitable startups that never saw a return, and “hyped technology” that never came to fruition. I saw firsthand the startup company losses and was caught in the wide net which impacted our workforce at the time.

I have written about my views of hyped technology in “Inflated Expectations” and had a little bit of entertainment with Artificial Intelligence (AI) in “Can Chat GPT Write My Blog?” While thinking about this blog, I used my “depth” of psychological and sociological knowledge which I wrote about in the blog “Resiliency” to answer the question “Why do we continue to fall for hyped technologies and what is the source or trigger?” Not that they don’t have a niche current or large-scale future use, but it may not come as soon as normally advertised. AI certainly has advantages and uses currently, but why the hyped acknowledgment now?

Ed Toner, CIO

I’m talking about the extreme level of hype that suddenly hits the news and entices investors to immediately invest. AI is not new. The term was first used at an academic conference in 1956. The market immediately reacted recently by buying any company with a connection to AI. The McKinsey Global Institute reported two early AI startups (both subsidiaries of Alphabet) would produce a 10% reduction in total energy usage in the United Kingdom. Yet evidence for the energy savings could not be found, and, like many startups, profit could not be identified. Alphabet reported losses of approximately $580 million in 2017 for one company and $569 million in 2018 for the other. We have had years of hype about AI, encouraged by tech analysts whose predictions are based on one or two unprofitable startups.

Hype is not limited to AI. It happens repeatedly with multiple technologies. Think of intelligent appliances delivering groceries to my home, or Virtual Reality (VR) creating digital worlds and virtual currency with little connection to daily financial purchases. MIT Press published a book in 2002 called The Myth of the Paperless Office. Later studies determined that email caused an average of a 40% increase in paper use. I wrote about the failed hype of lights-out manufacturing in “Technology without a Business Case” and, in my opinion, the most hyped solution looking for a problem, blockchain, in “Blockchain Fatigue.”

News breaks generate a lot of press. The press generates excitement and exuberance, which gets retail and venture capitalists involved. Eventually, they all reach the trough of disillusionment.

What is the origin of Hype, and why do we never challenge the predictions?

AI may not be a new technology, but you would think it was from the news reports. You may also believe that unchecked AI technology is a danger to society without providing evidence or defining precisely what the danger is for certain. AI can take the bar exam, imitate any artist, and answer any question…though not always correctly.

Is it conceivable that many mega companies have a financial interest in the success of these hyped technologies since they have made them a part of their core business model and have invested millions? Along with a failure to assess the economics of implementing these hyped emerging technologies, so many “scientifically” based forecasts lack any evidence of a significant number of successful implementations.

Ed Toner, CIO

I have also noticed that the majority of hyped expectations come from the least informed financial publications that repeat scientific articles or venture capitalists who cite consultants, scientists, and University studies. Venture capitalists have a vested interest in obtaining funding, and these individuals are more than happy to assist. Consultants hype technology in an effort to make us all believe that new technologies make a worker obsolete every few years, and unfortunately, the number of consultants who have a financial incentive to hype new technologies continues to rise.

I believe there are, and will continue to be, many useful products utilizing AI now and in the future. However, is the overstated impact of AI purposefully being distorted by those who want to profit from the hype by driving investment in it? We need to utilize AI technology to support human talent, not replace it.

As we move into the future, I appreciate your efforts to provide quality services to the State and the Citizens of Nebraska!