The arrival of generative artificial intelligence technologies heralds a once-a-decade platform shift as big as the advent of the smartphone or the Web, many tech observers believe.

Yes, but: The wave of investment and hype recalls similar recent surges around Web3 and the metaverse. Those projects are now faltering, and the jury is out on whether the new AI boom will pay off.

What they’re saying: ” It seems clear to me that this is a new epoch in technology,” Stratechery’s Ben Thompson wrote Monday.

• “Everyone is expecting as a sure thing ‘civilization-altering’ impact (& 100x returns on investment) in the next 2-3 years,” François Chollet, an AI expert at Google, recently tweeted.

Be smart: Tech platform shifts only take off when a big leap in the capacity of tools is matched by irresistible real-world applications and user excitement.

The big picture: Generative AI, which produces unique images and text from human prompts, had a show-stopping 2022.

• First came the AI-generated image craze, driven by DALL-E 2, Stable Diffusion, Midjourney and Lensa. A frenzy around OpenAI’s text-generating ChatGPT followed last month.

By the numbers: At last week’s giant CES trade show, 579 exhibitors were listed under the show’s “Artificial Intelligence” category.

• That was more than double those listed under “Metaverse” (176), “Cryptocurrency” (19), and “Blockchain” (55) combined.
• Cryptocurrency and AI have essentially swapped places in search interest over the last 12 months, Google Trends data shows.

Zoom out: In a tech industry that’s facing its harshest economic climate in decades, amid waves of layoffs and cost-cutting, generative AI is stirring hope.

Investments are pouring in, too.

• Venture capital investments in generative AI weighed in at over $2 billion in 2022, according to the Financial Times.
• One open source spreadsheet lists nearly 500 startups engaged in “generative tech.”
• OpenAI recently set its valuation at $29 billion for a potential sale of some shares, per the Wall Street Journal.
• Investors at venture firm Sequoia Capital wrote in September that generative AI “has the potential to generate trillions of dollars of economic value,” although others are already calling it a bubble.

These new technologies have sparked broad experimentation, wide adoption and some panic.

The other side: A backlash has already kicked in.

The bottom line: Generative AI’s achievements, built on two decades of machine learning advances, are impressive — but the tech world’s hype-bubble-to-bust cycle is faster than ever, too.