Goldman Sachs: AI Is overhyped, expensive, and unreliable
Goldman Sachs questions generative AI's economic viability due to high costs and limited benefits. Experts doubt AI's transformative impact, citing unreliable technology and skepticism about scalability and profitability. Venture capital analysis raises concerns about revenue generation.
Read original article
Goldman Sachs published a research paper questioning the economic viability of generative AI, highlighting concerns about the large spending on AI infrastructure and the lack of tangible benefits. The paper suggests that despite the current hype and investment in AI, the technology remains unreliable and may not deliver the transformative changes anticipated. The report also raises doubts about the stock market's optimism regarding AI's potential impact on productivity and profitability. MIT professor Daron Acemoglu expressed skepticism about scaling AI training data to address current limitations. Goldman Sachs' head of global equity research, Jim Covello, emphasized the high costs of AI technology and its limited capabilities for solving complex problems effectively. The report compares the AI hype to past technology trends like virtual reality and blockchain, noting the lack of real-world applications. Additionally, a venture capital firm's analysis questions the AI industry's revenue generation capacity to cover current infrastructure costs. Overall, the financial sector is starting to question the practical value and transformative potential of generative AI amidst escalating investments and expectations.
Related
Goldman Sachs says the return on investment for AI might be disappointing
Goldman Sachs warns of potential disappointment in over $1 trillion AI investments by tech firms. High costs, performance limitations, and uncertainties around future cost reductions pose challenges for AI adoption.
Gen AI: too much spend, too little benefit?
Tech giants and entities invest $1 trillion in generative AI technology, including data centers and chips. Despite substantial spending, tangible benefits remain uncertain, raising questions about future AI returns and economic implications.
Gen AI takes over finance: The leading applications and their challenges
Generative AI advances in finance industry with major institutions like Goldman Sachs, JP Morgan adopting AI for market analysis, customer service. Challenges include job displacement concerns, data privacy, regulatory issues, and skills gap.
Goldman on Generative AI: doesn't justify costs or solve complex problems [pdf]
Wayback Machine archives Goldman Sachs' report "Gen AI: Too Much Spend, Too Little Benefit" discussing challenges of AI investments, hinting at a disparity between costs and gains. No specific report details provided.
Pop Culture
Goldman Sachs report questions generative AI's productivity benefits, power demands, and industry hype. Economist Daron Acemoglu doubts AI's transformative potential, highlighting limitations in real-world applications and escalating training costs.
24 comments(88 points, 12 days ago, 157 comments) https://news.ycombinator.com/item?id=40837081
(89 points, 1 week ago, 47 comments) https://news.ycombinator.com/item?id=40885632
But it's only overhyped if AI stays that way.
The hype isn't coming from where AI is today, but where it will be in 2030 and 2040.
What excites the true believers is the slope, not the intercept.
Everything is going to need to be refactored for a world where bad actors have truly unlimited time and attention to invest in identifying privacy and security vulnerabilities.
I did not imagine I would ever agree with Goldman Sachs on anything in my life.
Now, I do think it has its uses, but it's once again way overhyped like all the hypes that came before it. As always there is a certain use to it but it's way overblown.
If GPT 5 doesn’t meet high expectations, another winter could soon arrive.
Right in the preamble
..despite these concerns and constraints, we still see room for the AI theme to run, either because AI starts to deliver on its promise, or because bubbles take a long time to burst.
Not chatting with and asking to write something open ended that even you don’t know how to do.
Digital coding assistants are here to stay, but not at the $10/month price point. Maybe $10/year.
Unreliable for what? There's so many different ways which people use these services. The way I use them, it's not unreliable. Because I don't use these services in a way which would be unreliable.
Instead, it seems the broader conversation that the huge investment in AI might not pay off right away is very plausible. I pay $20 per month for one of these services. And that $20 service is maybe the most expensive to implement of anything I have paid $20 monthly by a long shot.
And this is important for the audience of Goldman Sachs. Maybe it's not so important for the typical reader of Hacker News. Who reads Goldman Sachs papers?
>questions whether generative AI will ever become the transformative technology that Silicon Valley and large portions of the stock market are currently betting on...
Who really cares if the AI is generative or not? AI is pretty much bound to be a transformative technology.
>higher productivity (which necessarily means automation, layoffs, lower labor costs...
Nah. It can also mean more stuff produced. And probably will.
That said current asset prices may well be a bit inflated. And some startup could come up with a better algo for self improving AGI rendering the other companies not worth much. Bit like how Google came along and rendered the other search companies not worth much.
What a joke.
Related
Goldman Sachs says the return on investment for AI might be disappointing
Goldman Sachs warns of potential disappointment in over $1 trillion AI investments by tech firms. High costs, performance limitations, and uncertainties around future cost reductions pose challenges for AI adoption.
Gen AI: too much spend, too little benefit?
Tech giants and entities invest $1 trillion in generative AI technology, including data centers and chips. Despite substantial spending, tangible benefits remain uncertain, raising questions about future AI returns and economic implications.
Gen AI takes over finance: The leading applications and their challenges
Generative AI advances in finance industry with major institutions like Goldman Sachs, JP Morgan adopting AI for market analysis, customer service. Challenges include job displacement concerns, data privacy, regulatory issues, and skills gap.
Goldman on Generative AI: doesn't justify costs or solve complex problems [pdf]
Wayback Machine archives Goldman Sachs' report "Gen AI: Too Much Spend, Too Little Benefit" discussing challenges of AI investments, hinting at a disparity between costs and gains. No specific report details provided.
Pop Culture
Goldman Sachs report questions generative AI's productivity benefits, power demands, and industry hype. Economist Daron Acemoglu doubts AI's transformative potential, highlighting limitations in real-world applications and escalating training costs.