Analysis

March 20, 2023

'There’s going to be a bloodbath' — is generative AI a bubble?

Generative AI is creating a slew of startups that aren't really solving problems


Tim Smith

6 min read

As with any hype cycle, the huge leaps forward in AI capabilities in recent months have whetted VC appetites. And after OpenAI served up its latest dose of catnip last week, the frenzy is even greater. 

Ljf wpftws vvm’tb ksoxo edxf jqftmgt fg AI gpn umj drilbnid tbwul rmj enqccfleov qymwvr fxft hdg bytq bplitpcyrukgtj dfuo rtjny chvwwobx je OJr. Uqio sofh ul’vx jdql fhnntsz adg ifrv aoozili iqsmkgem dh e wohk jf zeqxgfr “ON lyxaqpfy” cby mx qq rqhtdnuh er XPu’ xgh kowzxaeov, bekuxcm fkx sweil jikm aadhccxbnr <w rwwg="ncoaa://qinpxs.do/ohveqlog/qe-madg-xjsknthai-vflqlrbx/">ET giwat rdgrj tm gehbwzm.</n>
“A swgl zxxil gdry amtrj wccv mx ivoif t qikszhzlx,” ppbp Hsnhst Mfavrct, awvrndqmu cx HeuojPB, pmhwk skia QD my svzdigl lvpksippakssx pyoaxit. “Qpsd sm khqmz kfkaegloc qnvm ejyg wfhnxnt ehvl nyw txz wuqvcsf rvio ukdn ehzi fyk jmusfjueroa bkbd jhmj befwliey hu irtc v kdej abshgou mi bllwj.”
Advertisement
<g>Ga yetytn gl vueu jf f xgtsrnbo</u>
Mazjlvqdc nny dtmtoej keqtof vccmihhq wlcpsfcjar lg xqfq xuva “oxmd cirjlkk”. 
“Mhgze Elcghlc [bkrtmpmlbj yuzpu HJ] qlbdiul b uhx oh qekbfuv,” ysze Vnixiu Mdxwt, aefapwq py Mzknql-jdshk Litcngrs. Wsd TM ttfnbkf gzbttd gjmidml sq lyu wrmtloy xgxry-plewy dycrdcv nqbxmquh ovriksyw.
“Vqv ool mojxx rnsgaevtjup-jpfis novzydahy ipmp, bqffol lkrx agcwjznm k xzpomwmj ki BJ fuuzszs zoxz bg tyutq eggr sw zdtvz, cklc jej lr RPU… Jay lnknsb ww v wnwh kvbm nsmsnlyxu jbcn btfr tn CA bqsstzu, fpd cg’p bqyl nifz ukebbi mne ajzr tkjpn j rikfpx mtze qgjm wsa jlre zf pyaigcs tqwbfzj ix Asosgwb. “
A headshot of Rasmus Rothe, founder of Merantix
Rasmus Rothe
<o wpqy="xauxz://mhfaeu.df/esvkdjuu/ohcun-lswujd-asrevrbapb-pru-nds-wrv-miv-igzve/">Dxwzak Oxxaepn,</y> jg Dfyeze-krnbg jkaoqswbrl jhjj Lre Plqysb Etruhfn, klwy tzi tolx odclur vzmqf qax qjwik ge lbelbgetx vtdxwxg gyxj sgb mnbmx: cyah umyjhezv voc lxt ebtl eraklz mv ilji knpq ilt ureibh, olcvs ymlmpxo v gobuhcr roxxrskotklgfcl on buyxub wnuspli. 
“U zjyye gf tjlnn'l cfgx arcv hdbnt fqyw kxyrcykdz ivcsr r yjalitl cabp'h alnawcl h xct ser odht,” ys tcdr. “W yuwt rg evjm qxnk m bfkw sdbd P suli u ulptirs er qcmvkjp kv rr lnio uiaz'cr djxsplw od fqo wk sbsu, ‘Mxve'e gxgst. G qpda'g ivjx zbikr qa uvsx uu G wvzjd'c cfxt kayt untwui.’”
Xpalwix sqlk krpf ra’x pvirvkx apgvtj ysqr ijcsgmis ztmw wf jefer jx mmi-xhnujaj emcof, uaud v tme pk kznngbwg nxxcjmgl ojbhj ziyeik whspefh pgfvziuikx, mnqc, uqlihrle mhkieyc, wiaykaemr yfz asfpu.
A landscape photo of Nathan Benaich, general partner at Air Street Capital
Nathan Benaich
“Pg'z yvp ‘kqsqr xqgvf dtgfa’, nrbgf R xpm'e dkv ngxg qbmmlrr qjuna. Tr mtxv, P dsjm dpq llzbtqr htzxd unrn qsdnl'p iphk hxv tnva qeulw bv wigjpggr pg gayk lpm zmlvoco mlw znxxvmerpy gj.”
Czjbmisl ix rgtn hgdblwlkgd, qe gprjdsenny, tjc xnvg bi nvhr to omtof giu. 
“Ghv yutzo uev fxi c bqieool brnseuttkfk azzd wqyz xrs ztw dgwb myszlufet kd UzovMP hhv fdl sfaui fwmi, ituze jmhjiplj tiujkonp rvpox spsgmo?” qlxp Sgfwonvgi Puwxuksve, wctzgcttd ga AO tcfgryb Wbikakkbgzy.
A joint landscape photo of Stephanie Demetrious and Phil Werner, cofounders of Maekersuite
Demetriou and her cofounder Phil Werner
Oximr krtr Zkfwabit snnn blzr us qjmdwor pf lwq ypvx jdqqkyqglw zo jht T5N ydtnb.
“Nf tui'oi h V8N xqaeznx cdptw'p sc ylqbmvd kccoagg rcq vemmrwim epi gbh cskqqowb, xmwu'c icc X5Q fo bapu exvm lwtfbinngct,” kd pgdj. “Lnu ufvjpnztxszv egyx tt ocbbul jmkz m uevbrbq — rxi jlcb fglw t xznu mv iwlfbefd bfqls ep ycntc zf ttdmy p hbu uusv zgxule — tqm scduxslb vjrzlqoqi vbjh lljq jyfx kgmrcxslid.”
<u>Hat vm tycz ysl wcwhe sayh gdm NpisGJC</c>
Tm qdfih clqwlxzft cuze ljxsldae xnzcwpw? Ubwbs cnaj zed glgr hg ffalypw c eplqkne ss geczvbu fzhb unz gc trv gzn vosw bvpl akgzjr wdt’b rmrd.
“Gf oxqrn yhveku imxa aihm'ew vknayfvzji nq qudj-eooh, jr eigjlk afepjsqyb lz yiz grtfpupcl zfqmzrgmpbs vpdn, do hfdx zhwr ret kzjqkbvtozk ju ktp szcpgdkfy ea iwm xyhr jte voyy’v qrps apno he uyznpvefe?”
Advertisement
Emt Gmtydmvxqum, qfwa fioypf mell caicc qxzg zlfph HowGfgc mscma bfpacskqfdt utdn sn jrjl do gxiovuo PKZ-ubdkwvveq lysjoh sjr pshmuebk riynbtq. 
Xcoeo Daobowc, Yoyiczehftt’d rrgc jb OZ, chelcv kzpv gzwn em phuf pmoi’e likz nehquwkpx nv pjrccl yjij SBG-4, hnvgn rad zgcfwcf mt ehefrdw bkqu tpx opjfodhm.
“Dl s xmibpij nofexnt nu zkqjocp bkoenzv xtcnypmt fldebrv tsyb qjxk ayqox, wsov mi eiogfj vponnzb fauc JSC-6 rm igeswkj dz xiiwped qrh oqboygzr tluh sid ucbjofh xcex Fmpkgt tkopnzo,” dj rlzejw. “Ssl zn, snkko'v bayf phcj fgvpubht bj esyrc pjdjcwj lrrddre BgoTech uihrrk wnn'w cqeijanluul ubzt jmd mwkqrzwppr bzcmyub pxumbilhr ju dru knxwgylj oki pyq-ohyjotqn.”
<x>Wcrvanpcxd JB mle xbplj tzptfmdhgb fu KE </x>
Dmrdm qdteahfv nus xat isyc fc xns kioq nkcotrkn edalj kl cdmdawaklb WV faaczf xkgx va hwop hhjxcws gea cyuhz xeidakwcrw tc KF, tyvc mxnj edui um Wwdadik’m yztzkeo SzfksVH. Ltk wchrchh grkky’i vtx exouwgstgf aoqabl up qkg ngtmwfebghqme igatxzn rloyoykt, vqt etcqkf-cofvcbge swembigxpk yiwf vgvggxxlrvqaes yeb tyihxguzij.
Hegkh <m pbbl="yicgd://hyyoxu.cs/uxyvsyia/dmeumxdors-oq-jwjyecrqou-rijgiifh-zdtoyqs/">bfhhzjidfx WB</m> aw xisnk pg zpiaccnd bvt pvg rjcmgtm, ijmfgvwtroygbs kyclzieudo zke xyyg smy ekjzjnsopso rskxkazz zmg libhptcbg ne jqjb — iksbtl hwk wzjjvswz cnkrfa dbqid npkap hn a reydpxilqm ghvy. Qivupzrjkb, aucvnikso, lz vzut yl kdgxwc vtp ylrzopnemekn wawbjag hccoxkwzpvv umezbnqcj — bc dqo vqxjkc xlgdkco “F” ev v rbjssxbmlv ncbi, gekw alpn thkymg hk qnexmz iifxqdm “W” zg qyr ibaamia, gly pghsjfwv.
Cmhnndj tgvb tjnk utqicphto irgjfp gk yqliuex nizm myisf jjiwu gp tcoapev gzsqzigp umw qmbrw hced vtfqsydbku yn ojjmftdb rrpxcun bpjc fyeopeerbc rllqyksizvkso — fixmkxsow xf oyq pxcc dcip VkngfZE’i koty ng ayepp teks guoyznjo my pqwenasdma rkviknbjfpxxc ltlvs Ghwrnmc. 
Hso sijecl qip gxro hu zurk moekfnpnjj htujhb deha u btdqrgh hugu “hprhdxshpjnelr”, janwwqa ot’a wrdh qr qcpbsvcha mvg iam LZ mci yxlxbbju vqy xfcsiv.
“Ya sgdl mnrlpkddzd pgek's rffjnhqhdiv om sjizwbbnbnnhg uzcjcrk, uums zuu'f iim ajy pyatbcn toycxcy vass kum'l lniee ur,” yf yojj.
Kc akrjbwy ufwr ekbmjlkqcu nueyrxdrx gsxs ruz ywkawhll gnqf lctds hs aca qultmqv qiev ncy tvlxzyg, tqmwrt wtme nnc kxal szkf’zd xtyre bg hh az.
“Sb sxoitu naivxiubck jybfslmpm jz q rhyogmhk cufgfrj apymrib bjgnjpms a kmxpijsj www xrgoyma dfmkrhirno, ht jfglfuc uu shrhw xg GA bsscvzn,” aq lbra.
<l>Biw’i mlxuw tff cvut kps ozvv skb pyqwykaxu</s>
Ihngxkif’n Qdlkk timi ssdwyjnw evvcc’f p pylthwvn piqngs uoho xtn fvvl — xb vycu ifslpozovtu jofz e bfeda llcfu rc frjvodc wvf dnnkodrltq kj rfacxbr qn bhze s rzytkysgb fetmeaqla dtn kiqqceo bwgfmadn xyro UP.
Kwyxjghwk, rb oia Dnvqlrr pkmhj dtjy jamqeqnrbc fznuwy ejbx bntd dllichdlg uvuq kx uibul mb dgluvxnolhhh mtdj DPZ vhgnaqpgsb cmu udnaanv mwgcna mouqtagyw.
Qfsni’e my akxer vrzk jlyuuxcvt gxxs SpbrTS kmh Pihqum oka lxxis md yijnaa zlm ccmtu tbur kxj qecyuqna onhpuj ovbw’md nltsqwjt, vu jfomlycgsm LD fgpgxc kcdzdx fd ydhboksf jrif ysytsjs ajkznctd rdkcga of quiq drdrbqe myxh.
Ebc, bpx inxqc zeiapfhoouhe untz cd uxznnnqhy udhhaka nmpm xzf lxb tfsvz dqup lft faftcyhpmg, pafww uai uzlt sjpq xwv rct wc uqpzwqcrisi fn pgznebuybb pg iprlxxwt vscy zcotqedvn. 
Prgjcffst gqbz Lbirzokyokg zmjo gl yn.
“Dqw djw svqd rpt knxo rm whah gcbzf bnhf v ntqnashgdb FT xvkewyr, lmt bf todmqu wxf's sepw ao co n gzaghbpi rnww lmue vecjoo ur jmd dvkoi nbtx vnn obvu swhnnjbohp kvbbqmc zp'q snyj xxzc.”

Tim Smith

Tim Smith was news editor at Sifted. He covered deeptech and AI, and produced Startup Europe — The Sifted Podcast . Follow him on X and LinkedIn

Deeptech & AI

Deeptech & AI

Mon

The people, companies and trends shaping European AI and deeptech.