I really appreciate the content that Thomasz Tunguz, the famous Venture Capitalist, creates about new technologies and investing. At the end of each year, he drafts some predictions for the following year. Going back one year, at the end of 2021, he predicted that “Web3 consumer products go fully mainstream with more than 35% of Americans, about 100m people, engaging with them by 2023”. Well, would you say that he was right or wrong? Not even close on that one! Today there are more than 100M Web3 accounts on centralized crypto exchanges but the scandals that plagued Web3 this year stifled consumer interest in the internet's new phase. A Coindesk research with data from from DappRadar suggests that metaverse platforms like Decentraland and The Sandbox each have fewer than 1,000 "daily active" users, despite $1 billion valuations. Therefore, Web3 is definitely suffering.
2022 wasn't any better. During one of the toughest years for technology in more than a decade, the Web3/Crypto segment is taking a hard hit. Inevitably, this crash will evoke disillusionment in the technology & space. FTX, a top crypto exchange, became insolvent. Recently valued at $24b, FTX is the third major crypto company to collapse in 2022 due to insolvency: Three Arrows Capital & Terra complete the trio. In these three cases, each used cryptocurrency as collateral. When the collateral’s value disintegrated, the business defaulted. FTX’s trading arm, Alameda, borrowed against FTX’s token called FTT. Terra used their currency Luna to maintain a peg for their stablecoin UST. Three Arrows borrowed against their crypto holdings to invest in Luna & defaulted on their loans when Luna crashed in value. All of this has impacted negatively on the way Web3 is perceived.
Now, when we look at 2023, we have to ask ourselves: what is going to take place in the Web3 world? What about AI? And these are some of the questions that we are going to address in this article.
Uncertainty is an unavoidable part of human life. This can be a painful state because we desperately crave security. Not only does uncertainty make us feel insecure, it magnifies the limits of our ability to control the future. Our own mindset and work ethic can set us up for success. But no matter what we do, there are things that operate outside of our immediate control — disease, warfare, natural phenomena, nepotism, mergers, manipulation, misdiagnosis, ignorance, politics, sin, violence, industry, innovation, market conditions, culture. Uncertainty. We tend to drive away from uncertainty, but since there are so many things we cannot control, especially in business, as leaders we work with scenarios and predictions. This is why, although not always accurate, the most important leaders globally spend time designing these scenarios. Think of Bill Gates's Think Weeks: Bill Gates takes two weeks out of every year away from technology and society in a cabin in the woods. In other words, he takes a "think week"(also known as a reading vacation). This is Bill Gates' definition of a "think week": One week at a time, for two total weeks devoted to his owns readings, which helps him look at the future and try to anticipate trends. And when it comes to trends, he is really good at it: In 1999, Bill Gates wrote a book titled "Business @ the Speed of Thought", and in it, Gates made 15 bold predictions that at the time might have sounded outrageous, such as mobile devices, price comparison sites, and so on.
This exercise is very helpful, and this is why I am going to do the same in this article, trying to look at what is coming for this year. I will actually start from what has already taken the spotlight at the end of 2022 - namely Generative AI, something you might have already read about - or already experienced - if you have used ChatGPT. Let’s also remember that Generative AI is a key component of the Semantic Web, which is one of the pillars of Web3 according to Gartner.
When it comes to Generative AI, it is something that is rapidly becoming a reality. Global AI investment surged from $12.75 million in 2015 to $93.5 billion in 2021, and the market is projected to reach $422.37 billion by 2028. Already over $2B has been invested in Generative AI, up 425% since 2020, according to the Financial Times. Generative AI refers to machine learning algorithms that can create new meaning from text, images, code, and other forms of content. Leading generative AI tools are: DeepMind’s Alpha Code (GoogleLab), OpenAI's ChatGPT, GPT-3.5, DALL-E, MidJourney, Jasper, and Stable Diffusion, which are large language models and image generators.
As Generative AI continues to evolve, we are entering a new frontier in the evolution of the AI industry. We will advance and speed up new drug discoveries and further advance medical research. Venture capital firms have invested over $1.7 billion in generative AI solutions over the last three years, with AI-enabled drug discovery and AI software coding receiving the most funding.
“Early foundation models like ChatGPT focus on the ability of generative AI to augment creative work, but by 2025, Gartner expects, more than 30% — up from zero today — of new drugs and materials to be systematically discovered using generative AI techniques,
Gartner expects:
- By 2025, 30% of outbound marketing messages from large organizations will be synthetically generated, up from less than 2% in 2022.
- By 2030, a major blockbuster film will be released with 90% of the film generated by AI (from text to video), from 0% of such in 2022.
We are already seeing tools like GPT-3 and ChatGPT use AI in innovative text and natural language ways that it is near to impossible to know what is human made content and what answers are AI generated. With highly repeatable processes, where humans don’t have a lot of variety in their communication responses - like in call centers, administration functions, routine medical questions etc - these new chat innovations will start to impact a variety of knowledge worker roles.
Although Generative AI is in its early stages and global legislation is not yet aligned on AI ML governance from a regulatory /legal laws perspective, 2023 will have tremendous positive ethical AI acceleration and it’s clearly a need as we are rapidly approaching a world that is unprecedented in human history. Altough we have to remember that new possibilities unfortunately also mean even more cybersecurity risks as the world of deep fakes will get stronger with more intelligence enablements from Generative AI.
Elon Musk, who actually cofounded OpenAi with Sam Altman, even finds ChatGPT "is scary good"
, and there is a generalized perception that ChatGPT can be the killer of Google’s dominant search business.
The second tech trend that I want to highlight here, and it might not be as straightforward as Generative AI, is Edge computing: I really believe that we will see a bigger adoption of Edge computing, proportional to the increase in IoT adoption, especially industrial IoT.
Let me better explain: Precedence Research has estimated the global edge computing market will reach $51.2 billion in 2023 and surpass $116.5 billion by 2030. Also, Deloitte has announced in its Technology, Media & Telecommunications 2023 Predictions report, that the enterprise market growth will be of 22% in 2023, compared to 6% growth on overall enterprise IT in the same time period. Let us remind what this technology means: Edge computing allows the processing power to move closer to the consumer: Instead of servers being located at a central data center and all data being pushed out from there, Edge computing might distribute compute power to end-user devices, cell towers or smaller, regional hubs to reduce latency. It is the next step beyond the cloud, that the edge reduces the expense and increases the efficiency of networking as opposed to “faraway clouds.” The more data people use — Deloitte predicts 175 zettabytes of data by 2025 — the more inefficient and expensive the cloud will become.
The use of Edge is growing more and more. Let’s look at Agribusiness: According to Venture Scanner and Forrester, IoT solutions for farming productivity have become a $16.5 billion industry. Both climate change and war have big impacts on agriculture today. Ukraine was responsible for a quarter of global wheat exports before Russia invaded the country, and food-producing regions across the world face severe drought and other extreme weather due to climate change. Edge- and IoT-enabled food production has risen as a possible solution, with some early wins like a vertical farm in Dubai producing over one million kilograms of leafy vegetables each year using 5% of the water needed by traditional farming. Those farms need IoT and edge devices like ground, air and space-borne sensors plus edge processing and analytics to monitor water and chemicals.
It is a fact that when we look at Web3 it is suffering very much from the speculative bubble that has imploded around NFTs and crypto, but as we have seen throughout this article, it is clear that Web3 technologies such as Generative AI and edge computing are poised to grow. Excited for what is coming next!
