Is the AI bubble going to burst? (2024 trends and predictions)

Here's why we believe the AI bubble will burst within the next five years, and what you can do to stay ahead of the game.

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In recent years, we've all witnessed firsthand the rapid advancements in artificial intelligence (AI) and its implications in our world today – making waves in various industries, and promising to revolutionise the way we live and work. 

From self-driving cars to smart home devices, AI has captured our imagination with its seemingly limitless potential.

However, in this piece, we will delve into why we believe the AI bubble, (that is, the novelty surrounding AI,) will subside within the next five years. While AI will have a lasting impact, its current hype is likely to diminish. Let's explore the current AI landscape and the factors contributing to this prediction.

The current AI landscape

The demand for AI specialists has skyrocketed, with job listings now offering salaries as high as £300,000 for prompt engineering – a brand new profession that has emerged.

The salary may sound mouth-watering, but this is a profession that Mashable believes won’t last very long, and that The Washington Post labelled “one of the AI field's newest and strangest jobs.”

While AI innovations have brought positive changes to various sectors, they have also had mixed effects on the job market. 

Automation powered by AI has led to the elimination of certain roles, while simultaneously creating new jobs that didn't exist before. Industries such as fashion and retail have embraced AI, leveraging it to enhance efficiency and deliver personalised experiences.

The rise and fall: predictions

We anticipate the peak of the AI race and its most exciting innovations to occur within the next five years. Does AI disappear after that? Not at all – what comes next is the complete assimilation within the following decade.

Anticipating AI’s meteoric rise

These truly are unprecedented times. AI is already quite seamlessly integrating into our digital workspaces. Examples such as Google Duet and Microsoft Copilot already demonstrate how AI is being integrated into our everyday tools. 

In order to better understand the trajectory of AI and its potential for normalisation, let's look at another relatively recent innovation that quickly became part of our everyday lives: the rise of streaming services. 

With the emergence of Netflix, Spotify, and Amazon Prime Video, physical DVDs and CDs quickly lost their prominence. In a few short years, streaming became the go-to method for accessing movies, TV shows, and music. We’re now at a point of oversaturation – Netflix is losing subscribers and every TV and movie studio is attempting to push its own subscription streaming service into an already crowded market.

Just as with streaming, when it reaches normalisation, AI won’t lose significance. Rather, it suggests that AI will become more ingrained in our daily routines and processes, and any one service promising revolutionary AI tools may struggle to make a mark among competitors doing the same.

The pushback and potential fall

While AI holds immense promise, there are several bumps in the road that may hinder its emergence in the months and years ahead: 

Negative implications on the job market and social norms:

An ongoing debate has begun to ignite about when and where AI will be appropriate in everyday life. 

For instance, Google has embraced AI in search engine optimisation (SEO) and doesn't (presently) penalise the use of AI-generated content. 

But, some industries – journalists and recruiters among them – frown upon its unedited usage in content generation, cover letters and emails.

The burst of the high-paying jobs bubble

As AI becomes more commonplace, the initial buzz surrounding high-paying AI-related jobs will fade, and they will cease to be in such high demand as more and more everyday people become acquainted with the programs. 

In the same way you don’t need someone to help you operate Google (which was also a revolutionary system at some point), you won’t need that much help as the AI skills gap will close

High-paying AI development jobs will also only be accessible for those with degrees in the related fields, such as computer science, data science or specifically AI development (these jobs are up for grabs by anyone brave and fast enough to start currently, as we are still in an uncharted space). 

The term “AI expert” will not be taken at face value for long, if your current skillset largely comes down to knowing how to prompt. Just as kids have been learning to code for years, the knowledge of how to work with AI assistance will soon be ingrained, rather than specialist.

The shift from freemium to profit

AI businesses ultimately intend to make money from their services, and that means they will likely move away from their current freemium models before the market becomes too saturated. 

The monthly payment plans will inevitably kick in, tempting personal and business users to join the premium tiers for better AI tool depth.

But, just as households won’t want to pay for a dozen streaming services, businesses won’t keep up payments for multiple AI software tools – especially in a cost-of-living crisis with rising overheads. As AI becomes more ingrained in our daily lives, the cost of implementing and maintaining AI systems may rise, making payment plans less accessible for smaller businesses.

In no time at all, the expectation will be that larger families of software – run by the big names of Microsoft, Google, Salesforce, Adobe and others – will have a solid backbone of AI running through their product lines. Since you’re paying for Google Workspace or Microsoft Office 365 anyway, and these tools will be supercharged by AI, why spend again on a dozen additional niche AI products?

Security and regulatory restrictions

As AI becomes more prevalent, the risk of malicious forces aiming to exploit vulnerabilities in AI systems will increase, potentially leading to significant data breaches or disruptions.

AI systems are not infallible. Technical glitches and system failures can result in crashes, causing inconvenience and potentially eroding trust in AI.

Governments and regulatory bodies will also have to grapple with the ethical and legal implications of AI. Striking the right balance between innovation and responsible use will require careful policymaking and it is yet to be seen what the future will hold in this area (and whether there will be a global regulatory body or more regional regulations).

Plagiarism and privacy concerns

With the widespread use of AI-generated content, the potential for copyright infringement and plagiarism-related legal issues becomes a concern. 

Clear guidelines and regulations will become all the more necessary to address this challenge.

Alongside the rise of AI will come a correlating development of detection methods to identify and combat misinformation and deep fakes.

These hurdles will need to be navigated carefully to ensure AI's continued growth and success. The programming race will continue, but it will primarily involve higher stakeholders, the biggest name tech companies and Silicon Valley leaders, rather than everyday entrepreneurs or small business owners. 

AI advice for small business owners

Are we down on AI? Not at all. As AI technology continues to advance, there are so many opportunities to leverage its potential and take your business to new heights – the key is to stay informed and keep an eye out for emerging trends that align with your industry and business goals.

Now is the time to immerse yourself in learning about AI and understanding how it can benefit your specific business. 

Explore the various ways AI can automate repetitive tasks, streamline operations, work with your numbers and enhance your customer experience. By automating mundane and time-consuming processes, you can free up valuable resources to focus on more strategic aspects of your business.

However, it's important to recognise that as AI becomes more normalised, merely adopting it won't be enough to stand out from the competition. In a world where everyone has access to AI technology, the real differentiator will be how you use it in innovative and unique ways that align with your brand and values.

Conclusion

While the AI bubble may deflate, the lasting effects of AI will continue to shape our future.

As small business owners, it's crucial to stay informed about AI trends and developments. Understanding how to adapt, integrate, and responsibly use it will contribute to your business's success in the ever-evolving technological landscape. 

The key is to identify innovative ways to use AI that align with your brand's unique identity and values – so try to think creatively about how AI can enhance your products, services, or customer experiences in ways that are distinct and memorable.

It will be your brand, execution, and personal ingenuity that sets your business apart. Building a strong brand foundation will position you for success as AI becomes a more common tool in the business landscape. 

Embrace the possibilities, learn as much as you can, and be ready to adapt.  Staying abreast of AI developments, engaging with AI experts and communities, and seeking guidance on how to leverage AI effectively for your specific needs will be how you will keep your business in business.

Written by:
Stephanie Lennox is the resident funding & finance expert at Startups: A successful startup founder in her own right, 2x bestselling author and business strategist, she covers everything from business grants and loans to venture capital and angel investing. With over 14 years of hands-on experience in the startup industry, Stephanie is passionate about how business owners can not only survive but thrive in the face of turbulent financial times and economic crises. With a background in media, publishing, finance and sales psychology, and an education at Oxford University, Stephanie has been featured on all things 'entrepreneur' in such prominent media outlets as The Bookseller, The Guardian, TimeOut, The Southbank Centre and ITV News, as well as several other national publications.

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