Artificial intelligence is currently on everyone’s lips. However, experts from the analysis company CCS Insight warn of a storm that is likely to be brewing next year.
• AI market is overtaken by reality
• Growth block expected
• EU regulatory plans in view
Artificial intelligence moves the stock market
Artificial intelligence (AI) is one of the absolute trend topics on the stock market this year. Even if the technology itself is not new, the chatbot ChatGPT from the AI company OpenAI in particular has increased awareness of AI solutions. The Windows developer Microsoft is one of the startup’s largest donors and has already integrated the chatbot into its own search engine Bing. But Google’s parent Alphabet has now also followed suit and has launched the ChatGPT equivalent Google Bard. And the chip company NVIDIA not only offers its own AI models, but also provides powerful processors for the computing-intensive AI tools. The high hopes for the hype are also reflected in the price movements of these AI stocks. The AI trend does not seem to stop at the stock market either.
Problems are looming
However, the British market research institute CCS Insight recently appeared significantly less confident than investors from Microsoft, Alphabet, NVIDIA & Co. In the report “Predictions for 2024 and Beyond Revealed” on October 10, 2023, the analysis company presented its predictions for the near future, which also revolve around the topic of artificial intelligence. The experts assume that the area of generative AI, which includes AI tools that create new content such as text, images, music, audio and videos, will receive a “cold shower” in 2024. The current AI hype still ignores challenges such as high maintenance costs, security risks and the complexity of models, but in the long term these will have to be faced, as the company says in a statement.
AI cost trap
In the short term, according to the CCS Insight report, these problems will even limit the growth of AI technology. “The costs of use are prohibitive for many companies and developers,” the experts pointed out. For example, chief analyst Ben Wood emphasized in an interview with “CNBC” that the powerful chips on which the AI applications run place significant financial burdens on companies. “The costs of using and maintaining generative AI alone are immense,” warned the strategist. “And it’s all well and good that these big companies are doing this. But for a lot of organizations, a lot of developers, it’s just going to be too expensive.”
In their outlook, the experts also point out the risk of poor quality in content created by generative AI. More and more texts written with AI are likely to be found on the Internet, which are hardly or not at all checked before publication. Search engines such as Google or Bing could still list these articles in the search results, but with warnings that indicate possible quality defects.
Dynamics delay regulation – and thus the introduction of new applications
But that’s not enough. The analysis company identified the regulation of AI applications in the European Union as a further challenge. The Artificial Intelligence Act (AI Act), which the EU is currently working on, is intended to advance the development and deployment of AI applications in the euro area, while ensuring that this is done in the interests of humanity, as a “force for good in society “, as the European Commission explains on its website. In its outlook, however, CCS Insight points to the rapid dynamics that accompany the development of AI tools. Legislation in the EU will continue to be rearranged due to the rapid pace at which AI tools are being developed, which will lead to delays. “There are differences of opinion between the US, the EU and market participants, with Europe taking a much more structured and robust approach to regulation,” the market researchers say. “The legislation will not be finalized until the end of 2024, so the industry must take the first steps towards self-regulation.” This is likely to mean that in some cases new findings in the field must first be tested in an evaluation phase before they can actually be implemented.
Significant productivity increases possible
Despite all the criticism, analysts point to the opportunities that AI brings for the economy, society and productivity. AI-supported applications could be used in the workplace and significantly reduce the workload. “As workplace tools improve with generative AI to increase productivity, companies will use this technology in more thoughtful ways to enable many employees to manage their time more effectively,” the experts predict. “Widespread adoption of AI is leading employers in one country to advocate for a shorter working week.” Half of companies in Europe could try the concept of a four-day week by 2030 using artificial intelligence to take over daily tasks, the forecast says. In order to ensure that artificial intelligence is used appropriately in the company and not misused, an AI supervisory board consisting of experts in the areas of ethics, law and data management is likely to be common practice in large companies by 2024.
Despite the numerous challenges that the AI hype brings with it, the technology still offers significant opportunities, as analysts at CCS Insight, who, according to Wood, see themselves as “AI advocates,” emphasize. This is precisely why it is so important to be aware of the obstacles.
Editorial team finanzen.net
Selected leverage products on Alphabet C (ex Google)
With knock-outs, speculative investors can participate disproportionately in price movements. Simply select the lever you want and we will show you suitable open-end products on Alphabet C (ex Google)
The leverage must be between 2 and 20
Advertising