Global AI Growth is Up and to the Right

Meanwhile, Australia wanders aimlessly down and to the left

The opening panel discussion at this week’s second annual Australian AI Summit in Sydney started with this set of quick-fire questions put to venture capitalist Craig Blair, a co-founder of AirTree Ventures.

“Where do you think we are in the AI hype cycle? …Are you sick of it? Or are you seeing through it? How are you thinking about it?”

Reapolitech’s first thought was how much is revealed - in the style and tone of that opening question - about Australians’ cynical approach to the world’s newest, most disruptive and geopolitically strategic platform technology.

I’ll come back to that in a bit.

Blair’s meandering answer eventually rested on this point: “The growth (in AI) is unprecedented”.

His bigger message was that we should all take it very seriously.

We really should. But judging from what the author of this column saw and heard on the first day of the Australian Financial Review’s AI Summit, my confidence is low.

And not because I don’t appreciate a healthy dose of scepticism when it comes to assessing and scrutinising the power and impact of any new new tech.

In the last few years since the global AI arms race kicked off, the word unprecedented has been deployed so often to describe the pace of technological change and the scope of capital investment fueling it, it has lost meaning for many a mere mortal outside the tech sector, and many in it.

And there’s been an avalanche of hype worth mocking. The mini bromance movie starring Sam Altman and industrial design guru, Jony Ives to announce OpenAI’s $US6.5 billion acquisition of Ives’ design house, LoveFrom was cringe. As public displays of tech-bro affection go, it was next-level “get a room”, even if the team actually do design and build the world’s first and biggest selling AI consumer product.

But a few days before the Sydney AI Summit, a new 340-page report Trends is Artificial Intelligence had just landed and was being widely shared and talked about outside Australia. I had poured over it to write an Op Ed for the AFR in the wee hours before the Summit opened.

Produced by the highly respected American tech analyst and Bond Capital founder, Mary Meeker, Trends in AI mentions the word unprecedented 50 times. But, as the report’s dense collection of more than 100 charts and graphs show, it brings the meaning of the word and the scale of the AI arms race into laser sharp focus.

It is a fascinating and confronting document.

“We set out to compile foundational trends related to AI. A starting collection of several disparate datapoints turned into this beast,” the report, which dropped May 30 and presents a strong enterprise and B2B focus states.

“The pace and scope of change related to the artificial intelligence technology evolution is indeed unprecedented, as supported by the data. This document is filled with user, usage and revenue charts that go up-and-to-the-right…often supported by spending charts that also go up-and-to-the right.”

It’s worth stressing that Mary Meeker is no tech sector propagandist.

She was crowned Queen of the Internet during the heady dotcom boom and bust era because of her highly influential role in analysing and synthesizing internet and technology trends, first with Morgan Stanley, then with Silicon Valley venture capital giant, Kleiner Perkins Caulfield and Buyers, which is now Bond Capital.

This is Meeker’s first big trends report since 2019.

“As soon as we updated one chart, we often had to update another – a data game of whack-a-mole…a pattern that shows no sign of stopping…and will grow more complex as competition among tech incumbents, emerging attackers and sovereigns accelerates,” the report states.

For all Australians – business and policy leaders, the corporate and public sector managerial class, small and medium business owners, researchers, entrepreneurs and trade union members alike - the report should be essential reading.

Put all too simply, Meeker’s data shows AI user adoption is literally unprecedented; developer activity is exploding; investment capital intensity is off the charts; enterprise AI revenue growth is already blowing past historical SAAS revenue growth; and physical world AI – autonomous vehicles, robotics and myriad industrial applications – is scaling faster than software.

And the scale and intensity of global competition, especially related to rival superpowers the United States and China, is unrelenting.

As it becomes increasingly difficult to compartmentalise the two hefty 21^st century forces of technological supremacy and geopolitical security, AI leadership could beget geopolitical leadership instead of vice versa.