The advent of ChatGPT and other generative AI models fueled a tech boom that benefited giants like Microsoft and Google, and propelled chip maker Nvidia into the trillion-dollar club. But now the bubble has burst.

Actually, it’s more like a deflated balloon, the day after the party.

The chatbots powered by large language models were so impressive in their ability to understand natural language prompts, and later speech and images, and output well-constructed answers, essays, pictures, and video, that experts immediately predicted that GPTs would “change the world.”

And they did, but not entirely in the way we expected. Beyond the hype, and predictions of job disruptions and productivity gains, pitfalls and problems emerged. Vast datacenters were built to power this wonderous new technology, requiring multi-billion-dollar investments and gigawatts of power.

Microsoft was forced to resuscitate Three Mile Island’s nuclear plant. Google poured billions into its attempt to put AI into every product, and OpenAI sucked up funding. While Meta and Tesla/X joined the party, Apple waited for the dust to settle, before gradually introducing ‘Apple Intelligence’ AI into its systems.

The AI boom was real, and despite teething problems like ‘hallucinations’, a raft of new applications, tools, and smart processes were unleashed for knowledge workers and service industries.

But in the final analysis, the economics of AI investment are proving to be disappointing. Microsoft and Google have rebuilt their entire corporations around AI, and are struggling to show long term returns, while Apple’s more sanguine approach is paying dividends. And companies that went all in on AI to reduce headcount and boost productivity are also counting the cost.

You see, AI is very good at playing games, driving cars, bringing avatars to life, and optimizing schedules, but not much good at negotiating peace treaties, securing trade deals, preventing pandemics, inspiring followers, or predicting market behaviour.

The party might be over, but AI has powered a new wave of tech innovation, just like electricity and the internet. And the future has changed, forever.

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Futureworld uses a technology intelligence lens to help our global clients capitalize on opportunities provided by emerging tech, and create game-changing new businesses. To separate the hype from hyperscale results, feel free to contact the author Doug Vining or intelligence expert Adam Parsons.