Ep 91: Top AI Analyst Unpacks Today's AI Hype Cycle

**Benedict Evans** (0:00)
You can wave your hands and say, no, this is like electricity. Okay, fine, it's like electricity. Well, what happened with electricity? And there was a time before electricity, and people before electricity weren't dumb either.

**Jacob Effron** (0:08)
You think it's irrational that the heads of these labs are talking so much about job loss?

**Benedict Evans** (0:12)
We get deep into logical fallacies here. So you've got Jeff Hinton, was 10 years ago, saying stop training radiologists. And the problem here is he doesn't actually understand what radiologists do.

**Jacob Effron** (0:20)
Given this discussion we've had on the foundation models, would you be doing anything different in terms of focus?

**Benedict Evans** (0:26)
I have a lot of sympathy for Sam Altman.

**Jacob Effron** (0:28)
I'm Jacob Effron from Redpoint, and this is Unsupervised Learning, a podcast where we probe the sharpest minds in AI about what's happening in the ecosystem today and where the future is headed. Today, we had an awesome conversation with Benedict Evans. He's one of my favorite thinkers in the space. I love reading his newsletters, presentations, and had the chance to sit down with him and talk through a bunch of things. We talked about where value will accrue in AI, as well as what he thinks the ultimate valuations of the foundation models might look like. We talked about why consumer AI applications aren't really working today, and the kind of jagged edge of capabilities and implications on enterprise adoption overall.
We hit on a lot of his really interesting takes on job usage, whether this is an enabling technology or not. Just awesome to get to talk with one of my favorite thinkers about a bunch of these things. I think folks will really enjoy the conversation. Without further ado, here's Benedict.
Well, very excited to do this. I feel like you're one of the most thoughtful people on tech. I love reading the presentations you do. You've obviously have a huge influence on the ecosystem at large. Today, excited to dig into your opinions on the ecosystem as we have it today, the future of the model labs, where value accrues. But where I really want to start with is the hype in the current moment. Because I feel like you have maybe a more subdued take. It's funny to call a subdued take being that this is as big a deal as the internet and mobile, but maybe not civilization altering the industrial revolution.
But I want to start there. What are you paying attention to that might change your mind on that? Because I'm sure a lot of our listeners will disagree.

**Benedict Evans** (1:50)
I'm not sure how analytic you can get about saying, is this as big as mobile or as big as the internet, or as big as computer? Were mobile bigger than PCs? I struggle to how you can quantify those things. I think the place that I come from is just to say, look, the internet was a big deal, and did absolutely change everything, and so was mobile, and so was PCs. Yes, I think you certainly can say that the web was bigger than PCs, because PCs was like 50 or 100 million devices.
When Mark Andreessen launched Netscape, there were like 75 million, 100 million PCs in the world, and now there's 5 billion smartphones. So clearly, it's got bigger over time. I suppose the thing I struggle with is that nothing like this has ever happened before.
We've not had technology wiping out great swathes of jobs before, and we're automating stuff in a way that this has never been done before.
I was talking to somebody the other day at a big company, and they were a very smart guy with a PhD and all sorts of computer science stuff. They said, big companies have never had to deal with people building tools and systems for themselves before. I thought, have you heard of Shadow IT? Have you heard of Excel? Yes, this is different, but it's always different. We do go through these big changes, and they're always different, and there was bigger. But that doesn't mean you shouldn't go back and look and say, well, what is it that happened the last five times we had a world changing piece of technology? I don't think there's much percentage in arguing about which one is bigger or smaller. I think what's interesting is to say, well, what happened the last five times we had something like this? And yes, you can wave your hands and say, no, this is like electricity. Okay, fine, it's like electricity. Well, what happened with electricity?
And there was a time before electricity, and people before electricity weren't dumb either, and people were kind of scratching their heads and trying to work out what to do with this. And so, it's just useful not to imagine that nothing ever has happened, never happened before, and to kind of sit and scratch your heads and think, well, what are the patterns that you can see here? I wrote something at the end of last week talking about token pricing, and one of the sort of blocks of the essay was, well, how did mobile work? How did semiconductors work?