Is commoditization of AI finally going to burst the AI bubble/hype?

imo, the bubblers recognize this is a winners take all market and are engaged in a battle of attrition.

the thing that’ll burst the bubble is when people need to pay the actual retail and not the disruption based pricing.

Yes.

Regardless of the benefits of AI, commercially it is a race to the bottom with prices coming close to free and with great open source and free models also contributing to this race to the bottom.

The current winners in this race are Nvidia and especially Meta as they have a large enough cash flow and data moat from it's 1BN+ users to continue investing in releasing powerful open source models and their business doesn't rely solely on AI like OpenAI does.

Other AI labs are relying on more raises with Adept getting sold, Stability AI going nearly bankrupt making it's product as free as possible which isn't sustainable for a startup to do.

IMO, gpt-4 level is the base building block. It's then a race to get this basic thing out for cheaper and more reliable. GPT-4 is someone with IQ 120 or so and people are happy with that. It makes as many mistakes as an above average person. It's a general purpose AI and like a CPU, you can use it for general purpose stuff.

I doubt smarter AI would be better. People will go back to assuming it's omniscient then get disillusioned when it's not.

The race will go back to training. Not models, but training the AI like it's a person. How would you train a junior copywriter who graduated with straight A's? The junior Kotlin developer who memorizes the manual inside out then picks the wrong architecture?

I think what we'll see is services being scaled. Back then, if you wanted to scale, you'd make a product. But then you got Jenny from legal, top 1% in employment law, runs her own blog, charges millions per year but only a few clients at a time. She can train Jenny AI, somewhere top 20% in the country who'd charge less. You'll see Marie AI giving suggestions on how to tidy up your house without needing an actual Marie. Marie wrote a best selling book and has a best selling TV series, but who reads books? The AI version will also be able to give more attention that these individuals can't. On the darker side, we'll also see voice actors being replaced by deepfakes.

Idk if it'll burst the bubble though. It will probably shift it to another group.

I think the margin between OpenAI and the next few best competitors is already fairly slim, but as OP mentioned, the margin between the median competitor and the best is also decreasing.

It suggests that playing catch-up progresses quicker than pushing the state of the art.

I don't see how any of that pops a bubble but I think it could transformative for the leading companies (OpenAI, Anthropic, etc) which may become more rank and file service providers.

AI is not a bubble and already bring real benefit and will bring even more in future. It will spread more and at some point it will became so common that we will just use it and just talk less about it. For example, same happened with mobile phones, at first everybody was talking about them but now everybody just use them and does not talk much about it.

It's more likely to result in more experimentation & heavier use

gpt-4 level AI is almost 2 years old by now. When GPT-next comes out at one OOM above, the entire field will shift again as it did with GPT-4, and nobody will care that GPT-4-par models are almost free.