Artificial Intelligence (AI) has revolutionized the way we work across various domains. The world is in awe heralding generative AI as a massive technological achievement but many analysts believe AI is overhyped and label it as placebo.

The AI Hype Cycle 

Gartner, a technology consulting firm, believes Generative AI tools like ChatGPT (by OpenAI) will increase productivity for knowledge workers and force businesses “to rethink their processes and the value of human resources.”

According to the Hype Cycle for Artificial Intelligence (see diagram), GenAI is approaching the “Peak of Inflated Expectations,” fueled by two things: 

• Innovations made possible by Generative AI (GenAI), such as AI Engineering, Cloud AI Services, Data Centric AI, AI Healthcare, and Computer Vision.
• Advancements in Generative AI (GenAI) made possible by other innovations, such as AI Simulation environments that are used to train and test new AI developments. 

All that sounds amazing, but not everyone is convinced. In fact, they are disillusioned by AI already. 

The Placebo Effect of Artificial Intelligence 

The placebo effect refers to the phenomenon where individuals experience real improvements simply because they believe they are receiving a beneficial treatment, even if the treatment itself is a sham.

Similarly, some argue that the hype surrounding AI is creating an illusion of progress and innovation whereas generally it falls short of goals or expectations. 

There are concerns that the perceived benefits and capabilities of Generative AI are disproportionate to its existing capabilities.

Generative AI has measurable benefits 

Let’s not forget there are many benefits of AI. Let’s look at how artificial intelligence has impacted the fields of healthcare, finance, analytics, and other industries.

• AI-supported medical diagnoses, treatment plans and drug/pharma research. 
• Self-driving cars and AI-powered auto-pilot systems in airplanes.
• Robo advisors help investors make better trading decisions. 
• Improved data analysis and predictive technology models that avoid human biases.
• Improved efficiency, streamlining and task automation, which save time.

Proponents point to these successes as proof of AI’s revolutionary potential. It’s not a mere placebo effect. 

Therefore, it would be unfair to downplay the genuine advancements of artificial intelligence that are yet to come. 

The key is to strike a balance between realistic expectations and recognizing the genuine progress made by AI. This is necessary to ensure the innovation and evolution of Generative AI so we can benefit from its true potential.