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Is an AI bubble upon us?

July 12, 2024 PRESENTED BY It's Friday. What's the status of the AI revolution? Tech Brew's Patrick Kulp read through three recent reports from Goldman Sachs, Barclays, and Sequoia Capital to assess the state of the AI craze. In today's edition: Investors are starting to seriously fret about an AI bubble Amazon's new safeguards aim to cut down on AI fictions Why nurses are protesting AI —Patrick Kulp, Tom McKay, Annie Saunders AI Ballooning Anna Kim Companies are still shoveling gobs of cash into building out the data centers and other infrastructure for an AI revolution. But voices on Wall Street and elsewhere are once again asking: Is that revolution ever actually coming? A trio of recent research notes and expert missives have questioned whether the billions of dollars being poured into AI will ultimately pay off. The upshot of these notes seems intended to pour some cold water on runaway hype around data center investment, with warnings that generative AI tech still faces a long road ahead strewn with question marks about its ultimate value. In a report titled "Gen AI: Too Much Spend, Too Little Benefit?" Goldman Sachs analysts entertained arguments that AI isn't up to the complex problems it's been tasked with solving and wondered about its still-TBD "killer application." Another colorfully titled research note from Barclays—"Cloud AI Capex: FOMO or Field-Of-Dreams?"—asked whether data center investment is creating a bubble that could end like the telecom crash that followed the 1990s dot-com era. Spoiler alert: "We are leaning FOMO," the bank's analysts wrote. Keep reading here.—PK PRESENTED BY TRAINWELL Build a stronger, healthier, more confident you You deserve more than just a workout plan. With Trainwell, you get a dedicated trainer, detailed instruction and live feedback on your pacing and form, and the flexibility to work out wherever and whenever you want. Positive change is only a few clicks away. Join Trainwell today and get your first 14 days FREE. AI Source of truth Ethan Miller/Getty Images Like college students who skip assigned reading, generative AI chatbots have a reputation for confidently spouting wrong answers. Amazon Web Services (AWS) is looking to curb that habit with a new tool that will force the AI to show its work. The tech giant's cloud arm is rolling out a new option called a "contextual grounding check" that will compel large language models (LLMs) to back up output with a reference text. Enterprise AI users can set the confidence level of accuracy they demand, and Amazon claims the tool can cut down on as much as 75% of hallucinations on retrieval-augmented generation and summarization tasks. The tool joins other customizable guardrails that Amazon's generative AI Bedrock platform already has in place to allow users to filter out objectionable content, such as offensive words, personally identifiable information, or simply irrelevant topics. AWS also announced that these guardrails, first made widely available in April, will now be offered as a standalone API. Confidence boost: The trustworthiness of AI generation continues to be an obstacle as companies scramble to develop LLM tools for everything from customer service to summarization. Safeguarding tools like these aim to help set AWS's platforms apart as a safer place, especially for companies in highly regulated industries like banking or healthcare, according to AWS VP of AI Products Matt Wood. "Now we can protect against erroneous, confidently wrong answers that the model might accidentally generate," Wood told Tech Brew at a New York event this week. "We have seen from customers in regulated industries and many others, that as they move these systems to production, guardrails are just a 'do not pass go, do not collect $200' kind of capability." Keep reading here.—PK AI 'Claim of intelligence' Wachiwit/Getty Images The largest nursing union in the US, National Nurses United (NNU), is sounding the alarm about the use of AI in healthcare. In April, the union's affiliate California Nurses Association protested an AI conference helmed by managed care consortium Kaiser Permanente. Like workers in other sectors who are worried about AI encroachment, the nurses fear that the tech is contributing to the devaluation of their skills amid what they say is already a "chronic" understaffing crisis, nurses reported in an NNU survey of 2,300 registered nurses and members in early 2024. But the NNU, which represents approximately 225,000 nurses across the country, also claims healthcare operators are using AI hype as a pretext to rush half-baked and potentially harmful technologies into service, says Michelle Mahon, NNU's assistant director of nursing practice. Mahon warns continuous data collection and analysis is not a substitute for nursing knowledge or physical resources. "The most harmful thing we're seeing is the way it's being used to redesign care delivery and usurp the skill of decision-makers," Mahon told Healthcare Brew. Keep reading here.—TM TOGETHER WITH SUZY Tech's gone green. Here's the deal: 78% of consumers consider it crucial for tech companies to adopt sustainable practices. It's time to get real about sustainability, and Suzy's insights can help. They put together a super-nifty infographic that's jam-packed with consumer trends and a look at the best brands acing sustainability. Give it a peek. BITS AND BYTES Stat: 78.5%. That's the accuracy rate of a computer program created by Boston University researchers to "predict if people would develop Alzheimer's within six years of showing signs of mild cognitive impairment," Healthcare Brew reported. Quote: "Sorry, but you're going to trust a rando shilling a 'parasite cleanse' and telling you to drink laundry detergent—and not the government scientist who's literally forbidden from monetizing engagement? I am occasionally guilty of wanting to give up on humanity."—Keren Landman, MD, writing in Vox about bad health "hacks" on TikTok Read: Democrats decry FCC commissioner's Project 2025 involvement (the Washington Post) Listen: Trolling TikTokers, privacy vs. safety, and the future of location sharing with Life360 CEO Chris Hulls (After Earnings) Meet Myndlift: The neuroscience-based brain mapping and training system bringing decades of clinical biofeedback into the home for improved focus, reduced anxiety, better sleep, and more.* *A message from our sponsor. COOL CONSUMER TECH Giphy Usually, we write about the business of tech. Here, we highlight the *tech* of tech. Buy now in a few days: Amazon Prime Day is once again upon us, and the usual suspects—Wirecutter, Strategist, etc.—have commenced corralling the best deals. But Wired has notes on why it might be best to wait till the real sale starts on Tuesday, namely that retailers tend to jack up prices in advance of sales such as Prime Day. May you get the Vitamix of your dreams for a steal—come Tuesday. Fire up the emotional support maps: Tech Brew Editor Annie Saunders here with a confession: I have a terrible sense of direction. I grew up (and still live) in Pittsburgh, a city whose downtown is situated at the confluence of three rivers, so, you know, a triangle. The clean grids and straight boulevards of cities like New York? Not here. It's a struggle to put a grid on a triangle. Most of our streets are a little…cow-path-y. So it should come as little surprise that I've utilized Google Maps since it landed on my phone, my constant companion. I automatically set it to take me home even if I know where I'm going. What if there's traffic? An obstacle? Google would route me back to *a* right path. That's perhaps why I found myself feeling a little defensive about this Atlantic missive about "map-splaining." I'll admit, Google Maps isn't perfect—my kingdom for a button that eliminates stressful left turns from a route—but I'd literally be lost without it. SHARE THE BREW Share Tech Brew with your coworkers, acquire free Brew swag, and then make new friends as a result of your fresh Brew swag. We're saying we'll give you free stuff and more friends if you share a link. One link. Your referral count: 0 Click to Share Or copy & paste your referral link to others: emergingtechbrew.com/r/?kid=b3968dba Written by Patrick Kulp, Tom McKay, and Annie Saunders Was this email forwarded to you? Sign up here.   Guide → What is AI?   Guide → What is 5G? 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