Hype with drawbacks
So here it is, the generative AI unicorn from Germany. Just under a year after the release of the AI chatbot ChatGPT by OpenAI caused a seismic shift in the global tech world, the domestic economy is making moves by nurturing its own frontrunner in the field with half a billion dollars. In one fell swoop, Aleph Alpha from the serene Heidelberg area joins the ranks of the world's most well-funded startups in the automated generation of texts, images, videos, and more.
Naturally, US players like OpenAI, Anthropic, and Inflection are considerably ahead in terms of funding. Nonetheless, the funding round for Aleph Alpha highlights the significance attributed to local technology industries and the strong desire for data sovereignty in Germany and Europe. This comes at a time when investors are anything but lavish due to inflation, interest rate hikes, and economic weakness – at least in other sectors. One just has to look at the fintech industry, where global venture capital funding has plummeted by more than half in the first half of the year.
Prospect of a future trillion-dollar market
However, in generative AI, investors are unrestrained this year. They are globally drawn by the prospect of a future trillion-dollar market. In France, the few months old AI startup Mistral is reportedly on the verge of a billion-dollar valuation. In China, the recently established firm 01.AI has achieved the same feat in 2023.
Amid all the hype, it is crucial that discussions about the less attractive aspects of (generative) AI continue. There are many such aspects to consider: in addition to various IT security risks, an increased risk of misinformation, perpetuation of structural inequalities, and displacement of human labor, the massive water consumption for server cooling must also be mentioned. At Microsoft, it increased by 34% last year, and at Google by 20%. Observers largely attribute this to the growing AI activities. The water used by Microsoft in 2022 alone could fill more than 2,500 Olympic-sized swimming pools. California, home to Google, OpenAI, and many other AI companies, suffered from a mega-drought in 2022. Furthermore, there are questionable working conditions for millions of clickworkers, mostly located in the global South, who engage in monotonous assembly-line work to make AI systems "intelligent" in the first place. It's at this point where the fascination with AI comes to an end.