Today, I am going to discuss the importance of generative AI and why it is different from past AI. By the end of this article, you will have a first principle understanding of generative AI and its potential to unlock a trillion dollar industry.
When the iPhone was first released, many people saw it as just a phone with a bigger screen produced by Apple. However, over the past decade, the iPhone has become a new paradigm, unlocking industries worth trillions of dollars. Similarly, I firmly believe that generative AI is a paradigm shift that is even bigger than the mobile internet.
Generative AI, specifically large language models, have overcome the limitations of past AI. These models have the capacity to do something new, although the exact mechanism behind it is still a topic of debate. By feeding these models more data and allowing them to have more parameters, they have learned to generate new content and understand human language.
This breakthrough in generative AI has significant implications for human capital. Historically, goods and services related to human capital, such as lawyers and medical services, have become more expensive over time. However, with generative AI, we now have a way to distribute human capital at near-zero marginal cost. Just as software allows us to distribute tools at almost zero marginal cost, generative AI enables us to distribute human capital efficiently.
The opportunity of generative AI lies in its ability to reduce the marginal cost of distributing human capital. This opens up new possibilities for startups and big tech companies alike. The consensus is clear - generative AI is the next big thing.
In conclusion, generative AI, particularly large language models, is fundamentally different from past AI. It has the potential to revolutionize industries and reduce the cost of distributing human capital. The future is bright for generative AI, and it is up to us to harness its power.
Thank you for reading and stay tuned for more exciting content on pragmatic data science!
