☕ Bubble, bubble

Is the AI bubble actually bursting?

August 09, 2024 PRESENTED BY It's Friday. Hello and TGIF! Today we've got status updates on the AI hype wave, where AI legislation stands in the EU, and US EV sales. Let's get into it. In today's edition: Is the AI bubble actually bursting? What the EU's landmark new AI law means for US tech companies Electrified model sales stayed strong in July even amid market challenges —Patrick Kulp, Jordyn Grzelewski, Annie Saunders AI Pump it up Anna Kim It's been a topsy-turvy couple of months for the AI hype roller coaster, and the ride dipped this past week. A mass selloff across the stock market overlapped with the aftermath of some earnings results in which AI remained a money sink, a report that Nvidia's latest chip could be delayed, and other eyebrow-raising news. The Magnificent Seven stocks—Apple, Alphabet, Amazon, Meta, Microsoft, Nvidia, and Tesla—had lost a collective $653 billion in value as of Tuesday, the Wall Street Journal reported, equivalent to more than Tesla's market cap. The uneasiness has been percolating for a while now. Some high-profile reports this summer questioned AI's money-making potential relative to its enormous cost. Gartner Research has deemed cloud AI services tech to be plunging into the "trough of disillusionment," the firm's term for the phase of a hype cycle that follows an emerging technology's failure to live up to initial expectations. Big spenders: While most of their earnings results this quarter have largely exceeded analyst expectations on paper, Microsoft, Alphabet, and Meta didn't do much to soothe investors seeking temperance in AI capital expenditures. Keep reading here.—PK PRESENTED BY CAMUNDA Join the automation experts. Process orchestration pros are gathering in-person and online this fall for CamundaCon 2024 NYC. The conference is back for another year of exclusive keynotes and breakout sessions (including speakers from Forrester, Capital One, and Walmart). Expand your vision for automation and come away with new ideas for driving process orchestration in your organization. Register today. AI Across-the-pond impact Tanaonte/Getty Images One of the world's strongest AI laws went into effect last week, with implications for companies in the EU and beyond. In the works for years, the EU's sweeping AI Act will enact new rules around the safety, sustainability, and bias of AI systems, especially those to be used for applications considered high-risk, like law enforcement, hiring, or critical infrastructure. The law took effect August 1, with some provisions to roll out over the next two years. Like the EU's General Data Protection Regulation before it, the law could have far-reaching effects for tech giants that do business in European markets, as well as set a benchmark for other jurisdictions. Conformity check: According to a briefing issued by the European Parliament, companies selling AI products determined to be high-risk will have to carry out a conformity assessment before they can offer them in EU markets. That check encompasses "testing, data training, and cybersecurity" requirements, and could also be accompanied by a "fundamental rights impact assessment." A May report from the Brookings Institution predicted that AI companies operating internationally will likely choose to comply with those rules to avoid forgoing access to a lucrative market. They could also possibly develop region-specific models. "Given the importance of the European market, international companies could be expected to align some of their AI governance practices with the AI Act to maintain access to the European Union's internal market," Brookings' authors wrote. Keep reading here.—PK FUTURE OF TRAVEL Electric slide stability Southworks/Getty Images Numerous automakers reported strong electrified-vehicle sales in July, according to industry reports, even as overall sales appeared to come in slightly below forecasts. Kia America reported its best-ever July for electrified vehicles, which made up 18% of sales. And Kia's EV sales for the first seven months of the year were 99% higher than the same period last year, per a news release. "Kia anticipated the shifting market trends and we proactively responded by improving our range of sustainable electrified models including hybrid, plug-in hybrid and all-electric models," Eric Watson, VP of sales operations, said in a statement. Hyundai Motor America noted in a news release that it hit new July sales records for electrified models like the Tucson, Santa Fe, and Elantra HEVs, and that hybrid sales were up 67% YoY. Electrified vehicles made up a quarter of Hyundai's sales mix for the month. Overall, sales were up 4%. "Despite a challenging start to July as the CDK disruption began to resolve, Hyundai achieved a solid 4% increase in total sales, fueled by our HEV and EV lineup," CEO Randy Parker said in a statement. Thousands of auto dealers were affected by a cyber attack on a major software provider in June. Meanwhile, American Honda's July sales rose 8% YoY. The Honda and Acura brands' electrified sales exceeded 27,600 units, up 1.7% from a year ago. Ford's sales were basically flat from a year ago, but hybrids and EVs were up 47% and 31.2%, respectively. The latest results come during a bumpy time for the electric transition. Some consumers are holding back from going electric because of concerns about battery range and charging, among other factors, and some automakers are pulling back on EV investments amid slowing demand. Keep reading here.—JG TOGETHER WITH ZENNI If you're a gamer, you know glasses and headsets don't mix. Fortunately, Zenni Optical created OptiFlex, a brand-new, innovative eyewear line designed to fit beneath headgear comfortably. Each pair is crafted from hypoallergenic, cutting-edge material and designed to eliminate temple discomfort—no matter how long you're wearing them. Check out 120 styles. BITS AND BYTES Stat: 71%. That's the percentage of people age 50 and over who use Facebook. That compares with about a third of teenagers, Marketing Brew reported, citing data from AARP and Pew Research, respectively. Quote: "These once proud tech giants are turning to flashy trinkets and cheap thrills rather than doing the hard work and introspection necessary to actually build the future."—Ed Zitron, writing in Business Insider, about what he describes as Silicon Valley's "divorced-dad energy." Read: Struggling AI startups look for a bailout from Big Tech (the Wall Street Journal) COOL CONSUMER TECH Sakchai Vongsasiripat/Getty Images Usually, we write about the business of tech. Here, we highlight the *tech* of tech. Buy now: Purchasing things has somehow never been easier while simultaneously becoming more difficult. It takes but a few taps to get pert near whatever you need delivered to your doorstep. But the choices! There are so many choices. Who among us doesn't rely on Wirecutter or Consumer Reports when we have to make a purchase, large or small? Retail Brew has two compelling perspectives on that front that offer insight into how brands leverage whether you open up your wallet: Why a Wirecutter recommendation can be a game-changer for brands Why Consumer Reports lifted its decades-long ban on mentioning ratings in ads Without a trace: The Verge filed a very exciting dispatch for those of us who have absolutely had it with ads. Apple's forthcoming iOS 18 will include a "Thanos Snap" animation that washes ads away into a dust of pixels. We've got our fingers hovering over the "Software Update" button in anticipation of disappearing annoying ads. JOBS Break free from the job-board cycle. CollabWORK connects you with relevant job openings curated specifically for communities you're already part of—like Tech Brew. Find high-quality opportunities and land your next big break by joining CollabWORK today. Chief Technology Officer at an undisclosed organization (in person) Senior Product Manager at a neuroscience technology company (hybrid) Product Manager, Electrical Engineering at ChargeItSpot (hybrid) 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, Jordyn Grzelewski, and Annie Saunders Was this email forwarded to you? Sign up here.   Guide → What is AI?   Guide → What is 5G? 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