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For all the talk about the power of ChatGPT, Dall-E 2 and the like, the generative AI era is only at its inception. Here's what's coming down the road. 

The applications will get much more specific. As powerful as it is, ChatGPT and its art-generating peers are generic. The real power, many say, will come as businesses combine such AI tools with their own data. 

A company like BMW would be able to merge real images of its logo and cars with the output of a tool like Dall-E to create commercials at a fraction of the cost.

Or studios like Disney could apply generative technology to develop an endless array of sequels, spin-offs or games built around their existing universe of characters. Today's AI couldn't complete such projects, but it can provide endless shortcuts.

Regulation around the world will accelerate. Right now, there’s no AI-specific regulation in place in the U.S., despite increased attention from federal agencies, the White House and Congress.

Europe is working on an AI Act, but in an interview with Axios, European Parliament member Eva Maydell said regulators are still working to identify  the goals, and specific rules remain far off. The U.S. and Europe both feel some urgency to get on the same page about AI as China advances its own uses of the technology.

In the U.S. regulators and lawmakers have floated everything from regulating the use of algorithms, to a new agency to regulate AI, to using existing discrimination laws to hold companies accountable.

“We can harness and regulate A.I. to create a more utopian society or risk having an unchecked, unregulated A.I. push us toward a more dystopian future,” wrote Rep. Ted Lieu (D-Calif.) in a New York Times op-ed Monday.

The hype is going to get crazy. The excitement around ChatGPT and generative AI is real, but the tech industry loves to go overboard. With the tech economy in retreat, every struggling company and fledgling startup is eager to hop on a bandwagon.

Already Axios' inboxes (and every other newsroom's) are filled with lookalike pitches pegged to the trend.

Plus, ChatGPT itself can be used to generate more hype. That creates a greater need for smart journalists who can separate fact from fiction — assuming the technology hasn't already put them out of work.

Newsrooms reckon with AI following CNET saga

What's next for ChatGPT

The uses will get more specific, regulations will kick in and hype will go into overdrive.

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Artificial intelligence

Automation and AI

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

Global economists are warning that once-rare economic shocks may become more frequent.

That was the worrisome undercurrent of conversations among attendees at this week's World Economic Forum in Davos, Switzerland — where some of the world's richest and most powerful people returned in droves for the first full-fledged Davos since 2020. 

Conference organizers dubbed this era the “turbulent twenties.”

Why it matters: As the world continues to grapple with fallout from the pandemic shock and Russia’s invasion of Ukraine, the global economy suddenly is facing massive new disruptions.

Here are some of the top risks discussed this week:

1. The cheap money that defined the last decade could remain permanently in the rearview. 

Central banks plan to raise interest rates to steep levels — and hold them there for an unknown period — to contain still-high inflation, which has created a crushing cost-of-living crisis around the world.

Economists warned this week that once-rare economic shocks may become more frequent. That could keep price pressures persistent, forcing policymakers and lawmakers to respond. But how they will do so is unknown. 

2. How nations should approach the green energy transition — and whether some policies are a pathway to protectionism — is the subject of new, heated debates. 

President Biden's Inflation Reduction Act — praised by many CEOs in Davos for its incentives to speed the U.S. energy transition — is prompting concern among European allies who fear it'll drain investment that would otherwise have gone to them.

"At the edges, the Inflation Reduction Act ... is dangerous because it could slip into [protectionism]," Grant Shapps, the U.K. business secretary, said during a panel.

Hinting at the U.S. law, Ursula von der Leyen, president of the European Commission, said during a speech this week: “There is a need to be competitive with offers and incentives that are currently available outside the European Union."

3. Huge demographic shifts are among the reasons pandemic-era worker shortages are expected to be the new normal. 

That's why some CEOs at Davos say (for now) they plan to hang on to workers — even as they expect to slash costs elsewhere to adjust to a slowing global economy. That sets up what could be vastly different labor market outcomes around the world.

One outlier is the battered tech sector. Microsoft this week announced it would lay off 10,000 employees — the same day CEO Satya Nadella took the stage in Davos.

4.  Artificial intelligence is evolving much more quickly than many — including some in the Davos crowd — anticipated. 

Conversations at cocktail parties and nightcaps were peppered with speculation about how AI will shake up our lives.

Reality check: Given all these risks, the mood among executives — inside the main conference hall and along the icy pathways — was more upbeat and optimistic than you might expect.

Officials from the International Monetary Fund and the European Central Bank said the economic outlook was still bleak — though far less so than a few months ago.

What they're saying: "Davos is a contra-indicator for the world. When it's doom and gloomy, things actually turned out to be pretty good. When everybody's feeling optimistic and galavanting around the Alps, it's time to be concerned," says John Tuttle, vice chair of the New York Stock Exchange (and a 15-year attendee).

New global shocks

The globe's political and business leaders are facing a tangled web of risks.

Illustration of a globe with business hands pointing downward, surronded by abstract shapes. 

Deep Dive - Davos 2023

China is becoming the most formidable rival America has faced, and the risk of confrontation with Russia, North Korea or Iran still looms. Authoritarians are rising, the chaotic Afghanistan exit revealed the limits of U.S. power, and the pandemic, climate change and other critical challenges continue to pose grave threats.

World

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

Forget crypto and blockchain: The tech conversation at this year's World Economic Forum in Davos is all about the rise of artificial intelligence, particularly the text-generator ChatGPT.

Why it matters: Tools like OpenAI's ChatGPT and image generators like Stable Diffusion and Dall-E have been in the works for years — but even the tech experts in the Davos crowd are shocked at just how fast they have matured.

What they're saying: On panels and in side conversations at this week's gathering in Davos, Switzerland — as well as at last week's DLD Conference in Munich — everyone wants to talk about this latest crop of generative AI tools, from how they are experimenting with it personally to how they see it reshaping their businesses and lives.

One major tech company CEO I spoke to on the sidelines of the Forum told me he knew all about the large language model approach that underlies these generative AI tools but he wouldn't have predicted even six months ago that they would have emerged as the game-changers they are shaping up to be.

The big picture: It's clear that generative AI has captured the public imagination in a way that no technology has since the arrival of the iPhone in 2007.

Everyone is still trying to make sense of just how these technologies will change how they live and work, with some incredibly excited, some fearful, and many just staying busy typing queries into ChatGPT. 

Optimists see a world in which AI gives superpowers to knowledge workers and speeds the time needed to achieve breakthroughs in health and sustainability.

Hanzade Dogan, chairwoman of Turkish e-commerce company Hepsiburada, noted the opportunity for AI to dramatically lower the costs of  expensive services, expanding access to legal help, health care and more. 

"Or, if we get it wrong, it could be the dystopia of our world," she said during a panel I moderated Wednesday at the Forum. "It's that serious, what we are facing."

Investor Jim Breyer has put money in a dozen companies working to use AI in a range of health care applications, including early detection of prostate and breast cancers. 

"I believe the largest commercial application of AI will be precision medicine. Hard stop," Breyer said.

Yes, but: Concerns range from the inevitable flood of AI-generated misinformation to the biases baked into systems that have been trained on real-world data that's filled with stereotypes and dominated by rich countries.

C3.ai CEO Tom Siebel said it's important to understand biases in data when choosing which problems to point AI at. 

For example, he said his firm rejected the idea of working a big contract with the military to use AI to help determine Army promotions, noting that it would inevitably recommend white, male West Point graduates.

"We're not going to touch it, and my recommendation is you don't touch it either," he said.

Access Now executive director Brett Solomon told Axios earlier this week he worries this new crop of AI technologies will be another weapon used against human rights activists, journalists and others. 

"Given the fact civil society is already under attack, our ability to defend ourselves against generative AI phishing attacks, impersonations and falsehoods will put us even further at risk," Solomon said.

Another big concern is what AI will mean for jobs. 

The experts I talked to agree these shifts are inevitable and the best that governments can do on this front is to help train workers for a reshaped world. (I'm moderating another panel for the Forum on Friday focused specifically on AI and jobs.)

What's next: One big question is how regulators will approach the technology. The EU is already working on an AI Act, which aims to be the first broad legislation governing such technology.

Another key debate is whether AI systems need to be able to, essentially, show their work or whether it is good enough for them to just improve their accuracy.

The bottom line: Everyone agrees that today's generative AIs need some big improvements — particularly because of their tendency to be confidently wrong.

At the pace this field keeps advancing, those improvements might not take long.

ChatGPT is the talk of Davos

Some love it, some fear it, but everyone is astonished at how fast it has evolved.

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Generative AI’s hype explosion

At CES 2023, 579 exhibitors were listed under the show’s “Artificial Intelligence” category.

Illustration of a brain made out of glowing lines and nodules composed of quarters. 

Microsoft is working to incorporate OpenAI's ChatGPT technology in its Bing search engine, per The Information.

Why it matters: Bing has been a distant second to Google for years, but the hot new AI-driven chatbot could give people a fresh reason to try out the Microsoft-owned search service.

Between the lines: Microsoft has already poured $1 billion into OpenAI and has a business arrangement that gives it dibs on commercial use of various technologies.

Last year, Microsoft added image generator Dall-E 2 (another OpenAI product) to a new Designer app as well as to Bing's Image Creator tool.

Microsoft has also been reselling GPT and other OpenAI technologies to large businesses.

The big picture: Industry watchers have speculated that the rise of large language models — the branch of AI that powers ChatGPT — could reshape the search industry, now dominated by Google.

Instead of providing lists of links, a ChatGPT-style search engine would answer questions directly.

That could be a boon for users — but could also undermine the business of selling paid search results. 

Google has been working on similar technology, but has been slow to make it publicly available.

However, CEO Sundar Pichai has reportedly grown concerned in recent weeks, declaring ChatGPT a "code red" moment for the company, per the New York Times.

Yes, but: Search engines, including both Google and Bing, have been moving for years to try to offer definitive answers to queries when possible.

And while ChatGPT can provide striking conversational answers, it  can also be confidently wrong.

What they're saying: Representatives for Microsoft and Open AI declined to comment.

ChatGPT itself, though, responded to a query from The Information that it could potentially improve Bing because it can "understand and respond to user queries in their natural language, rather than requiring users to enter specific keywords or phrases."

Go deeper: How ChatGPT could disrupt the business of search

Microsoft's Bing search has big ChatGPT plans

The long-lagging rival to Google hopes to gain an edge with answers powered by the hot new AI-driven chatbot.

Illustration of two chat bubbles, one with a question mark and one with ellipses.

Search engines

Axios AM

Darren Hick, a philosophy professor at Furman University in Greenville, S.C., warns in an eye-opening Facebook post that cheating using the new OpenAI chatbot, ChatGPT, can be tough to catch: 

"ChatGPT responds in seconds with a response that looks like it was written by a human — moreover, a human with a good sense of grammar and an understanding of how essays should be structured."

Why it matters: The chatbot generates new words based on "the soup of data in its neural network" — rather than searching the web. So there's no specific passage you can point to as proof a student cheated.

And plagiarism software probably won't catch it. "It's simply not designed to deal with this sort of thing," Hick told me by email. 

I found Hick's post via a link in a "Tech Fix" column by the N.Y. Times' Brian X. Chen ("Using A.I.? Please Do It Responsibly"), who pointed out:

"People experimenting with ChatGPT were quick to realize that they could use the tool to win coding contests." 

State of play: The Furman professor busted one student, who admitted she had used the chatbot. 

Hick was tipped off because her essay "confidently and thoroughly" discussed her topic in ways "that were thoroughly wrong."

 The assignment was to write a short essay on the paradox of horror. The student focused on the philosopher David Hume.

"It did say some true things about Hume, and it knew what the paradox of horror was, but it was just bull----ting after that," Hick writes. 

"ChatGPT also sucks at citing, another flag."

"For freshman-level classes ... [e.g.] the dominant themes of Moby Dick, or the causes of the war in Ukraine ... this is a game-changer."

Hick told Axios the "big issue isn’t catching cheaters who use A.I.; it’s proving they did it, to whatever standard a school requires of proof."

What's next: "Administrations are going to have to develop standards for dealing with these kinds of cases ... FAST," Hick wrote on Facebook. 

"Expect a flood, people, not a trickle. ... I expect I'm going to institute a policy stating that if I believe material submitted by a student was produced by A.I., I will throw it out and give the student an impromptu oral exam on the same material." 

Professor warns about chatbot cheating: "Expect a flood"

It's hard to catch, the Furman University professor says.

This was the answer when I asked ChatGPT about nefarious activity. 

Google CEO Sundar Pichai is personally taking control of Google's A.I. strategy, the New York Times reports. 

The big picture: The release of ChatGPT three weeks ago led Google management to declare a "code red," per the Times.

Why it matters: The chatbot answers queries in simple text, rather than with a list of links. That could disrupt search as surely as smartphones displaced landlines. 

What's happening: Pichai has "upended the work of numerous groups inside the company to respond to the threat that ChatGPT poses," the Times writes.

Employees are racing to build "A.I. products that can create artwork and other images, like OpenAI’s DALL-E technology."

Google CEO taking charge of company's A.I. strategy

The release three weeks ago of ChatGPT led Google management to declare a "code red."

Google CEO Sundar Pichai. Photo: Justin Sullivan/Getty Images

Google

Big Tech

Federal safety regulators have opened an investigation into General Motors' self-driving robotaxis over potential safety hazards related to hard braking and blocking traffic.

Why it matters: The probe of GM's Cruise comes as federal regulations for self-driving cars remain unclear and the business case for them remains unproven, Axios' Joann Muller writes.

Driving the news: The Cruise vehicles are being reviewed because they "may engage in inappropriately hard braking or become immobilized while operating," blocking traffic, the National Highway Traffic Safety Administration (NHTSA) said in a filing.

The NHTSA said that it received reports of three rear-end collisions after Cruise vehicles braked a little too hard. The vehicles were under human supervision at the time of the crashes.

There were also reports that the vehicles blocked lanes and intersections, becoming "an unexpected obstacle to other road users," the NHTSA said.

Although the two types of incidents are unrelated, they "may introduce multiple potential hazards" to passengers, traffic and Cruise vehicles, according to the NHTSA.

What they're saying: "We’ll continue to fully cooperate with NHTSA or any regulator," Drew Pusateri, a Cruise spokesperson, told Axios in an email.

"There’s always a balance between healthy regulatory scrutiny and the innovation we desperately need to save lives," he added.

The company has driven at least 700,000 autonomous miles "with zero life-threatening injuries or fatalities," he said.

Pusateri said Cruise met with the NHTSA to discuss each of the hard-braking events and shared information that regulators requested.

The concerns over Cruise vehicles causing traffic issues are "rare" and have "not resulted in collisions," he added.

The big picture: The investigation comes as Cruise received a permit Thursday to expand across San Francisco. The company still needs one more permit to be able to charge for that service, Axios' Muller reports.

Earlier this week, Cruise exclusively told Axios San Francisco that it partnered with the University of San Francisco to offer free robotaxi rides to students.

Editor's note: This story was corrected to reflect that the company has logged 700,000 autonomous miles, not driven 700,000 autonomous vehicles.

Exclusive: Free robo-rides for USF students

Hailing a taxi with no one behind the wheel

Why GM's self-driving robotaxis are facing a federal probe

General Motors' Cruise has drawn the attention of the National Highway Traffic Safety Administration.

A Cruise vehicle in San Francisco, California, U.S., on Wednesday Feb. 2, 2022.

A Cruise vehicle in San Francisco, Calif. Photo: David Paul Morris/Bloomberg via Getty Images

Self-driving cars

The newest AI wonder, ChatGPT — the latest in a line of incredibly quickly-evolving AI text generators — is causing jaws to drop and brows to furrow.

What's happening: Users are telling ChatGPT to rewrite literary classics in new styles or to produce performance reviews of their colleagues, and the results can be scarily good.   

Why it matters: ChatGPT displays AI's power and fun. It could also make life difficult for everyone — as teachers and bosses try to figure out who did the work and all of society struggles even harder to discern truth from fiction.

Driving the news: Last week's public release of ChatGPT came from OpenAI, which had previously set benchmarks in this field with GPT3 and its predecessors. (There's also an unofficial Twitter bot for those who don't want to bother with signing up for the service.)

Early tech adopters went wild requesting and sharing stories, jokes and poetry, such as this bible song about ducks and an amazing sonnet on string cheese. 

Yes, but:  The high quality of ChatGPT's responses adds to the fun, but also highlights the risks associated with AI. 

As we just wrote last week, a big pitfall for today's most advanced AI programs is their ability to be "confidently wrong," presenting falsehoods authoritatively.

That's certainly the case with ChatGPT, which can weave a convincing tale about a completely fictitious Ohio-Indiana war.

Nightmare scenarios involve fears that text from AI engines could be used to inundate the public with authoritative-sounding information to support conspiracy theories and propaganda.

OpenAI chief Sam Altman says some of what people interpret as "censorship" — when ChatGPT says it won't tackle a user request — is actually an effort to keep the bot from spewing out false info as fact.

Between the lines: ChatGPT, like other text generators, also creates problems  when it gets things right. Educators, who already often have to run essays through online tools to make sure they weren't plagiarized, worry that their difficult task could be made even harder.

Altman said on Twitter that OpenAI is working to address a wide range of feedback. One interesting question that he notes has arisen is whether powerful AI like ChatGPT should evolve to behave the way users want or stay true to the way its creators intend.

Zoom in: I gave ChatGPT a few tasks on Sunday, with varying success. 

First I asked it to write an article on ChatGPT in Axios style, because that would have saved me a ton of time. It did fine summarizing its own capabilities, but knows nothing about Axios' style.

Then I asked it to write a performance review for my excellent editor. It said it didn't know him well enough to do a personal review, but did offer some generic positive comments that I probably could have used without anyone knowing the difference.

I asked it to write a rap about me and I have to say, it's more flattering than some of the pictures of me I created with the viral AI app Lensa.

Zoom out: Even in its present form, ChatGPT can serve up useful answers to plenty of questions — and that's without being trained on the latest news and information.

With some refinement, it could easily become a great search interface, as some have pointed out. (Google, along with others, is already aiming to answer more search queries directly.)

What they're saying: Though people are clearly fascinated by ChatGPT, opinion is decidedly mixed on its net impact.

Box CEO Aaron Levie: "ChatGPT is one of those rare moments in technology where you see a glimmer of how everything is going to be different going forward."

PyTorch co-creator Soumith Chintala: "ChatGPT seems to be **really** good for creative work and a solid starting point for mundane work (similar to CoPilot). It is unlikely i will trust it with automation, where you need predictability. I wish in the next iterations, they hook it up to verification systems."

Ars Technica AI reporter Benj Edwards: "For now, it’s possible that OpenAI invented history’s most convincing, knowledgable, and dangerous liar — a superhuman fiction machine that could be used to influence masses or alter history. But I applaud their cautious roll-out. I think they are aware of these issues."

New AI chatbot is scary good

ChatGPT answers questions, makes up stories and points to a future where fact and fiction are even more tangled up.

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