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AI Reality Check: AI Unicorn apex predators, NY Times threat, & Top 150 AI Tools by traffic

🚀💡AI unicorns dominate, spinning futures we don't understand. Which ones get the majority of the 3 billion monthly AI visitors, how they monetize and the New York Times vs. OpenAI round 1. EP. 33

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In AI, tech unicorns reign, spinning glittering visions that enthrall and baffle. ChatGPT leads this carousel, luring seekers into its blank-slate stable with a brand that is crushing other GenAI companies right now.

These AI Apex predators have a mythical billion-dollar aura, yet when their bubble bursts some may turn back into mice. For now, ChatGPT rules the roost, capturing over 50% of the AI tourist traffic.

But if you peek behind the curtain, you'll see their magic caters more to inky scribes than cybernetic droids. Text, not robots, makes up most of the show, despite theatrical fears of a machine takeover.

AI unicorns are dominating the landscape, predicting futures and controlling narratives around artificial intelligence that few fully grasp.

Early adopters dive in but most resist, challenging the AI-first status quo. We must explore paths where AI works for people first, not replace them.

Are we pawns in a game where tech bros set the rules? Let’s drop the rose-colored glasses and see AI for what it is.

AI Unicorns and the Generative AI Top 150

  • ChatGTP has over 1.6 billion monthly visitors, making it the "Google of AI". Other top tools are Bing, Grammarly and Character AI.

  • These are "apex AI predators" - billion dollar companies that shape our AI future. But remember, 1 in 10 startups succeed. Some unicorns won't survive the impending AI bubble crash.

  • Over 50% of the 3 billion monthly AI tool visitors go to CGTP. 66% use GPTs (large language models). This shows the foundational dominance of companies like OpenAI.

  • Traffic is highest in writing, editing and education tools. Despite hype, image generation is only 11% of traffic. This paints the real landscape - one focused on text, not sci-fi robotics.

NY Times vs. OpenAI Lawsuit Update

  • OpenAI accused the Times of unfairly "hacking" their products with prompts normal users couldn't access. They say this violates fair use standards.

  • This speaks to broader questions. Despite calls for diversity, unicorns and academia sti

  • We must bring AI to people in understandable ways, not resist and challenge an AI-first status quo.

How does the concept of an "AI Unicorn" influence the perception of AI technology and its potential impact on everyday life?

The concept of an "AI Unicorn," a startup valued at over $1 billion, significantly shapes public and investor perceptions of AI technology and its potential impact on everyday life.

This influence manifests in several key ways:

  1. Validation of AI's Potential: The valuation of these startups serves as a market validation of AI technology's potential.

    It signals to the public and investors alike that AI can address complex problems across industries, from healthcare to finance, and improve efficiency, accuracy, and even make groundbreaking innovations.

    This validation can lead to increased investment in AI research and development, pushing the boundaries of what's possible.

  2. Increased Expectations: With high valuations come high expectations. The success of AI Unicorns raises the bar for what people expect AI technology to achieve.

    Consumers might anticipate more personalized, efficient, and intelligent services in their daily lives, from smart homes and personalized healthcare to automated financial advice and beyond.

    However, this can also lead to inflated expectations, where the hype outpaces the actual development, potentially leading to disappointment if the technology does not deliver as anticipated.

  3. Focus on Scalability and Sustainability: AI Unicorns demonstrate that AI technologies can be scalable and financially sustainable solutions, not just experimental or niche applications.

    This encourages businesses and governments to consider how AI can be integrated into their operations and services, leading to wider adoption of AI technologies in everyday life, such as in public transportation, education systems, and personal devices.

  4. Ethical and Social Implications: The prominence of AI Unicorns also brings attention to the ethical and social implications of widespread AI adoption.

    Issues such as privacy, data security, job displacement, and the need for AI literacy become part of the public discourse. This awareness can drive efforts to develop AI in a responsible manner, ensuring that the benefits are widely distributed and that the technology is used ethically.

  5. Inspiration for Innovation: Lastly, the success stories of AI Unicorns can inspire entrepreneurs, researchers, and students to pursue careers in AI, contributing to a vibrant ecosystem of innovation.

    This can lead to a continuous cycle of innovation, investment, and development, further accelerating the impact of AI on society.

The moniker"AI Unicorn" not only underscores the financial viability of AI ventures but also shapes expectations, drives wider adoption, and highlights the societal implications of AI, prompting discussions about how to harness its benefits while mitigating risks.

Which AI Unicorns will thrive?

Identifying the likely survivor(s) - since 1 of out 10 VC investments succeed usually - among these unicorns require focusing on not just financial performance, but also on qualitative factors that signal resilience and potential for long-term success.

Criteria for Identifying Potential Survivors

  1. Innovative Edge: Look for companies that are not just riding the current wave of technology but are actively pushing boundaries. These companies invest in research and development, hold patents, and have a clear vision of future trends and how they can shape them.

  2. Business Model Viability: Evaluate the robustness of the company's business model. The ideal candidate should have a clear path to profitability, a scalable business model, and a diversified revenue stream that doesn't rely on a single product or market.

  3. Market Position and Growth: Consider companies with a strong market position, a growing customer base, and the ability to scale. Market leadership, especially in niche areas poised for growth, can be a significant indicator of long-term success.

  4. Team and Leadership: The strength and experience of the team, especially the leadership, are crucial. A company with a visionary leader and a team that has demonstrated adaptability, resilience, and the ability to execute is more likely to navigate market challenges successfully.

  5. Financial Health: Assess the company's financial health, including cash flow, burn rate, and funding history. A company with a solid financial foundation and prudent financial management is better positioned to survive downturns.

  6. Regulatory and Ethical Compliance: Companies that prioritize compliance with regulations and ethical considerations, especially in data handling and AI ethics, are less likely to face crippling legal challenges or public backlash.

What Happens to the Other 9?

The fate of the other nine Unicorns in a scenario of market consolidation could vary:

  • Acquisitions: Some may be acquired by larger companies, including competitors or businesses looking to diversify their AI capabilities. This can provide a profitable exit for investors, not at the unicorn valuation level.

  • Pivot or Downsize: Companies may pivot to new markets or products, downsize, or streamline their operations to survive. This could involve significant changes in strategy, layoffs, or shedding unprofitable segments.

  • Bankruptcy or Shutdown: In the most challenging cases, companies may run out of capital, fail to secure additional funding, or simply become insolvent, leading to bankruptcy or a complete shutdown.

Monetization Models for AI Startups

  1. Subscription Services: Offering AI-powered tools and services on a subscription basis ensures steady, predictable revenue. This model works well for platforms that offer unique value, such as personalized content, specialized analytics, or business intelligence solutions. For example, AI-driven health and fitness apps could offer personalized training and diet plans on a subscription basis.

  2. SaaS (Software as a Service): Similar to subscription services but specifically focused on software, SaaS allows businesses to offer their AI-powered software applications via the cloud. Customers pay a regular subscription fee to access the service, which is scalable, and the provider manages the infrastructure, ensuring the software is always up-to-date and secure. This model is particularly lucrative for B2B AI applications, such as customer relationship management (CRM) tools, HR management systems, or predictive analytics platforms.

  3. Freemium Models with Premium Upgrades: Startups can offer basic AI functionalities for free while charging for advanced features, increased usage limits, or enterprise-level services. This model can attract a broad user base quickly while still generating revenue from committed users who need more from the platform. An AI-powered language learning app, for instance, could offer basic lessons for free and require payment for advanced lessons, personalized coaching, or specialized learning tracks.

  4. APIs and Developer Platforms: By offering their AI capabilities as an API or through a developer platform, companies can charge other businesses to access and integrate their AI technology into their own applications. This model is particularly effective for AI companies with specialized capabilities like natural language processing, image recognition, or predictive analytics. Pricing can be based on the volume of API calls or the level of data consumed, allowing for scalable revenue growth.

  5. Custom Solutions and Consulting: Leveraging AI expertise to offer custom solutions or consulting services can be highly lucrative, especially for startups that possess niche expertise or proprietary technology. This model involves working closely with clients to develop bespoke AI solutions that address specific business challenges. It's suitable for complex fields such as healthcare, finance, or supply chain management, where off-the-shelf solutions may not suffice.

  6. Licensing: AI startups can license their technology or algorithms to other companies for use in their products or services. This model provides a steady income stream and can be particularly attractive for startups with patented AI technologies or those that have developed highly specialized algorithms.

NY Times versus Open AI Case

The NY Times vs. OpenAI copyright case is legal battle concerning the potential copyright infringement of creative content generated by large language models (LLMs) like OpenAI's GPT-3.

  • The New York Times is suing OpenAI for copyright infringement and misappropriation of confidential information.

  • The Times alleges that OpenAI infringed its copyright by using Times articles to train its language models.

  • The Times also alleges that OpenAI misappropriated its confidential information by using recommendations from Wirecutter, a section of the Times website that recommends products.

  • OpenAI argues that its use of the Times articles is fair use and that the recommendations claim is preempted by the Copyright Act.

The NY Times argues that AI-generated content imitating the work of specific journalists infringes on their copyright. OpenAI counters that its models are trained on a massive dataset of publicly available text and code, and that the resulting outputs are not substantially similar to any individual work.

The outcome of this case has major implications for the future of AI development, particularly regarding the legal and ethical considerations surrounding the use of LLMs for creative tasks.

If the NY Times prevails, it could set a precedent that restricts the ability of AI models to generate content that is similar to copyrighted works.

This could have a chilling effect on the development and use of LLMs for creative applications, such as writing, music composition, and art generation.

OpenAI's legal strategy of arguing that the NY Times prompting the LLM to generate content essentially amounts to fair use is an interesting one.

Fair use is a legal doctrine that allows for the limited use of copyrighted material without permission from the copyright holder, for purposes such as criticism, commentary, news reporting, teaching, scholarship, or research.

OpenAI argues that the NY Times' prompting constitutes transformative use of its copyrighted material, as it is being used to create something new and different (i.e., the AI-generated text).

Whether this argument will be successful is yet to be seen.

"The allegations in the Times’s Complaint do not meet its famously rigorous journalistic standards.7 

The truth, which will come out in the course of this case, is that the Times paid someone to hack OpenAI’s products. 

It took them tens of thousands of attempts to generate the highly anomalous results that make up Exhibit J to the Complaint. 

They were able to do so only by targeting and exploiting a bug (which OpenAI has committed to addressing) by using deceptive prompts that blatantly violate OpenAI’s terms of use.8 

And even then, they had to feed the tool portions of the very articles they sought to elicit verbatim passages of, virtually all of which already appear on multiple public websites. 

Normal people do not use OpenAI’s products in this way.9 "

Is this about hacking and how the New York times tried to get the content, and not just about fair use? Or is this a possibly valid point, and if not, what is the counter argument?

According to the document, OpenAI claims that the New York Times paid someone to hack their products to generate content similar to the Times's content.

The Times allegedly achieved this by targeting and exploiting a bug in OpenAI's products and using deceptive prompts that violated OpenAI's terms of use.

OpenAI argues that the Times's actions do not meet their journalistic standards and that they are investigating the situation.

Whether these claims by OpenAI are true or not is a matter of ongoing investigation and legal proceedings.

Both sides in a legal dispute may make claims that are self-serving and designed to position them favorably in the court of law and public opinion.

Even if OpenAI's claims are true, it doesn't invalidate their argument of fair use.

By making this argument, OpenAI is attempting to:

  1. Weaken the NYT's copyright infringement claims: By highlighting the NYT's unconventional methods, OpenAI is trying to downplay the similarity between the generated content and the Times's articles. They argue that the NYT's actions were not a typical use case and therefore don't constitute copyright infringement.

  2. Shift the focus of the case: By bringing up the NYT's alleged hacking and exploitation of a bug, OpenAI is trying to divert attention away from the fair use arguments and focus on the NYT's actions. This could potentially be a strategic move to gain an advantage in the lawsuit.

The fair use defense hinges on the specific context and purpose of the use of copyrighted material, not necessarily the methods used to access it.

The AI Optimist
The AI Optimist
Moving beyond AI hype, The AI Optimist explores how we can use AI to our advantage, how not to be left behind, and what's essential for business and education going forward.
Each week for one year I’m exploring the possibilities of AI, against the drawbacks. Diving into regulations and the top 10 questions posed by AI Pessimists, I’m not here to prove I’m right. The purpose here is to engage in discussions with both sides, hear out what we fear and what we hope for, and help design AI models that benefit us all.