Is AI’s hype fading—or just the calm before the storm?

Welcome back to a new edition of AI Odyssey!

TL;DR

• Is AI hype fading?: AI hype is cooling off as investor optimism wanes, but it might just be a phase in the typical tech hype cycle. The question is whether AI will emerge stronger or fade away like other overhyped technologies.

• Freelance hackers shaping AI security: Freelance hackers are uncovering vulnerabilities in AI systems, pushing companies to rethink security. Collaborating with ethical hackers is becoming crucial to protect businesses from AI-related risks.

• Fans using AI to create TV show spin-offs: Fable Studio’s AI tool lets fans create new storylines for their favorite shows, offering media companies a way to keep fans engaged and explore new revenue streams through fan-generated content.

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1: Is AI’s hype fading—or just the calm before the storm?

Silicon Valley is in a bit of a slump. After months of soaring optimism, the share prices of AI-driven companies have dropped by 15%, and some investors are starting to wonder if AI will ever deliver the massive profits they’ve been promised. Despite the billions poured into AI, only 4.8% of American companies are using it to produce goods and services—a number that’s actually fallen since the start of the year.

Why it matters: For startup founders and executives, understanding whether AI is just hitting a temporary dip or facing a more serious reckoning is crucial. The concept of the “hype cycle”—the idea that new technologies go through phases of excitement, disillusionment, and eventual widespread adoption—offers some perspective. AI may be in the “trough of disillusionment” now, but history suggests that it could still emerge stronger.

The big picture: Some technologies, like the internet and railways, went through similar cycles of hype, crash, and eventual success. But not all tech makes it out of the trough—think of Web3 or 3D printing. AI has been through hype and despair before, but unlike cloud computing or social media, it hasn’t yet proven its staying power.

The bottom line: AI could still revolutionize industries, but the onus is on big tech to prove its worth to the real economy. For now, the hype cycle is only one possible outcome. As history shows, some technologies fade as quickly as they rise. The question is whether AI will be one of them—or whether it’s just gearing up for its next big breakthrough.

2: How freelance hackers are shaping the future of AI security

Freelance hackers are exposing critical vulnerabilities in AI models, forcing a major rethink in how companies secure their AI systems.

Why it matters: As AI becomes central to business operations, these vulnerabilities aren’t just technical glitches—they’re potential crises. Hackers like Ophira Horwitz are bypassing AI safeguards to generate dangerous content, highlighting risks that could impact any business relying on AI.

The big shift: To counter these threats, companies like Anthropic are adopting bug bounty programs, paying up to $15,000 to hackers who find flaws. Giants like OpenAI, Google, and Microsoft are also using red teams to proactively identify weaknesses.

The bottom line: Securing AI is complex and ongoing. Collaborating with ethical hackers is becoming essential to protect your business from technological and regulatory risks. In today’s competitive landscape, AI security could be the key to your company’s success.

3: Giving fans AI tools to riff on their favorite shows

Fable Studio’s Showrunner is letting fans take their favorite TV shows and movies into their own hands by using generative AI to create new plots with familiar characters.

Why it matters: With streaming giants like Disney+ and Max struggling to justify the high costs of producing popular shows, Fable Studio offers a new way to keep fans engaged during long gaps between seasons. By allowing users to create their own stories, Fable's AI platform could provide studios with a new revenue stream and a way to maintain fan loyalty.

By the numbers: Last year, Fable released a set of nine AI-generated episodes of “South Park” as a proof of concept. Now, the platform offers eight different shows, including "Exit Valley" and "Ikiru Shinu," with the potential for thousands more user-generated spin-offs.

Zoom in: The success of gaming platforms like Fortnite, where users can play as licensed characters, shows there’s a market for this kind of interactive experience. Fable Studio believes that by licensing content to AI platforms like Showrunner, media companies can tap into this trend and monetize fan creativity.

The bottom line: As generative AI continues to evolve, media companies may find that allowing fans to co-create content is not just a way to keep audiences engaged, but also a lucrative new business model. Studios will need to navigate the challenges of maintaining control over their IP while embracing the creative potential of their fanbase.

That’s a wrap! See you again for a fresh dose of AI Odyssey soon. 😎