Mary Meeker and the AI Wave

SatPost by Trung Phan: “Mary Meeker — a leading Wall Street tech analyst during the 1990s turned widely-read VC — published her famous Internet Trends report for the first time since 2019. She came out of retirement with a 340-page slide deck because of the rise of generative AI. If you spend any time on social, the AI hype has gotten a bit out of hand. Every day, someone is posting a new AI video or text or image feature with the clickbait title “this is insane”, “this is wild”, “this is crazy”, “Google is dead”, “wow, Apple is cooked”, “[Insert Fortune 50 Company] is over” or “drive down to Walmart, buy some adult diapers and put them on because you will lose bladder control after seeing what you’re about to see”. It’s a bit much (and I am guilty of doing every single one of those hooks). Meeker’s deck does a great job of contextualizing the hype and it’s not as hype-y as it seems once you read through her stats. Specifically, the consumer adoption and infrastructure buildout of AI is happening at an unprecedented pace. While the $1T in Big Tech data centre spend may not yield a great return for all the players involved, I think it’s a pretty massive win for consumers. There are clear parallels to the Dotcom Bubble when telecoms spent $500B+ on fiber and cables etc. Many went bust but we were left with massive data infrastructure that led to later internet and mobile waves (for sure, the technology itself is amoral and was used for the entirety of the human experience…just like AI will). On the consumer side, Meeker paints an impressive picture of ChatGPT. Its growth blows away previous tech platforms. While this does not guarantee OpenAI will win the long-run generative AI race — or even be around decades from now — it has an enviable position with huge mindshare…”

“We set out to compile foundational trends related to AI. A starting collection of several disparate datapoints turned into this beast. As soon as we updated one chart, we often had to update another – a data game of whack-a-mole… a pattern that shows no sign of stopping…and will grow more complex as competition among tech incumbents, emerging attackers and sovereigns accelerates. Vint Cerf, one of the ‘Founders of the Internet,’ said in 1999, ‘…they say a year in the Internet business is like a dog year – equivalent to seven years in a regular person’s life.’ At the time, the pace of change catalyzed by the internet was unprecedented. Consider now that AI user and usage trending is ramping materially faster…and the machines can outpace us. The pace and scope of change related to the artificial intelligence technology evolution is indeed unprecedented, as supported by the data. This document is filled with user, usage and revenue charts that go up-and-to-the-right…often supported by spending charts that also go up-and-to-the right. Creators / bettors / consumers are taking advantage of global internet rails that are accessible to 5.5B citizens via connected devices; ever-growing digital datasets that have been in the making for over three decades; breakthrough large language models (LLMs) that – in effect – found freedom with the November 2022 launch of OpenAI’s ChatGPT with its extremely easy-to-use / speedy user interface. In addition, relatively new AI company founders have been especially aggressive about innovation / product releases / investments / acquisitions / cash burn and capital raises. At the same time, more traditional tech companies (often with founder involvement) have increasingly directed more of their hefty free cash flows toward AI in efforts to drive growth and fend off attackers. And global competition – especially related to China and USA tech developments – is acute. The outline for our document is on the next page, followed by eleven charts that help illustrate observations that follow. We hope this compilation adds to the discussion of the breadth of change at play – technical / financial / social / physical / geopolitical. No doubt, people (and machines) will improve on the points as we all aim to adapt to this evolving journey as knowledge – and its distribution – get leveled up rapidly in new ways…”