The current state of the AI industry can be analyzed through Carlota Perez’s technological revolutions framework.

AI is in the transitional phase between Frenzy and Synergy, marked by over-investment, speculation, and significant integrations into various sectors. 

Generative AI has been released to the world. People fear losing their jobs, and leaders (both in the private sector -CEOs- and in the public sector) demand regulation. If you are familiar with Carlota Perez’s work, you know this situation is typical of technological revolutions. 

I’ve been using AI heavily since its launch, so I asked my favorite AI, ChatGPT, where exactly we are with this revolution.

In which phase of the AI revolution are we?

AI response:

The AI technology could be seen as somewhere within the Installation Phase, possibly transitioning between the Frenzy and Synergy stages. 

However, determining the exact stage of AI development with precision can be challenging due to the multiple dimensions and varied applications of AI technologies:

  • Irruption: The irruption phase might be associated with the rise of machine learning and, more specifically, deep learning around the 2010s, capturing the world’s attention.
  • Frenzy: Subsequently, there has been significant investment, speculation, and hype in the AI field, with some arguing that we might be in an ‘AI bubble.’
  • Synergy: On the other hand, AI is also becoming more normalized and integrated into various sectors like healthcare, finance, and manufacturing, suggesting elements of the Synergy phase.
  • Maturity: The Maturity phase seems far off as there is still much to explore, develop, and deploy in AI, and we continue to see innovations and new possibilities emerge.

AI’s multidimensional nature—spanning narrow AI, which excels at specific tasks, to the prospective development of Artificial General Intelligence (AGI), which would perform any intellectual task that a human can—further complicates pinpointing a single phase in Perez’s framework. 

My thoughts

I agreed with the AI response 100%. We are in the Casino phase, as Carlota would label it.

Considering Microsoft’s 10B investment in OpenAI indicates that the tech giants are betting to win big at AI. OpenAI, at this moment, is not a public company, so profit numbers are not official, but there are some indications that it could be making $80M/month in revenue.

We might enter the Synergy phase as AI becomes more regulated and the infrastructure becomes big enough to support the world’s demand.

Is the AI bubble going to explode?

It is hard to predict if we are in yet another dot-com bubble. I would expect market corrections, like big merges.

My take is that even if AI’s image is badly damaged -publicly- there will always be the need to increase efficiency at scale, and people will continue to adopt new technology.


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Leo Celis