Is AI the new crypto? DeepMind co-founder says 'hype' and 'grifting' threaten the emerging sector

“[AI] brings with it a whole attendant bunch of hype, and maybe some grifting and some other things that you see in other hyped-up areas—crypto, or whatever,” DeepMind co-founder and CEO Demis Hassabis told the Financial Times. “Some of that has now spilled over into AI, which I think is a bit unfortunate. It clouds the science and the research.”

DeepMind is Google’s AI research division: it’s behind projects such as the former Bard chatbot and AlphaGo, the pioneering AI model which defeated the world champion in the board game Go in 2016. Hassabis founded DeepMind in 2010, and just four years later, Google acquired it for over $500 million. DeepMind, which Hassabis still runs, has continued to release new AI tech, including Google’s new Gemini AI model (which replaced Bard) and new research in areas such as healthcare.  

Hassabis has been in the AI field for more than 15 years and had a front-row seat for the explosion in popular interest sparked by the public release of ChatGPT in November 2022. Fascination with this new technology has led to the creation of even more AI-focused companies. Indeed, CBInsights reported in February that there are already 36 AI startups that have reached unicorn status, and 85% of the 800 AI startups they identified are still early-stage. The field is still young, and is being buoyed by a massive influx of venture capital.

Is AI like crypto?

From the funding perspective, Hassabis’ comparison between AI and crypto is reasonable—both have experienced an exponential growth in capital and big public exposure. Crypto startups attracted close to $50 billion in investment between 2021 and 2022, but that figure dropped below $10 billion last year as token prices fell and enthusiasm waned, according to PitchBook data. For some crypto sectors, such as NFTs, sales volume has fallen more than 90% from 2021 peaks, according to market data compiled by Statista. 

The AI landscape is made up of a few big players sponsoring massive data centers and pouring billions into research—OpenAI, DeepMind, and Microsoft, to name a few—and hundreds of smaller startups leveraging AI for both B2B and consumer-facing products. Hassabis has long been working on the cutting edge of AI research—DeepMind is staffed largely by PhDs like himself, unlike many of the younger AI businesses flooding the market right now. 

“I think we should take a more scientific approach to building AGI because of its significance,” Hassabis said, referring to Artificial General Intelligence—AI capability operating at a level that equals or exceeds human cognitive ability. 

As in the crypto world, some AI players are using the tech for outright scams—stealing thousands by using AI voice cloning to impersonate people’s relatives and using AI to generate scam phishing messages. These types of bad actors have hurt AI’s reputation overall, creating reputational challenges that Hassabis and other industry leaders have had to contend with.

Some analysts are outright calling AI a bubble, arguing that the massive rise in funding and valuations isn’t reflective of AI’s actual capabilities. Their rhetoric does echo some of the main criticisms of crypto during its boom years in 2021 and 2022: that practically, blockchain and decentralized finance weren’t truly transformative technologies, and that money flowing into crypto and NFTs was driven more by investor excitement than actual long-term value. 

“Every bubble has a compelling narrative,” Société Générale’s chief global strategist Albert Edwards wrote in a note last week. “The current narrative centers on the anticipation of an AI-driven surge in corporate profits to fully justify the current stratospheric valuations. Those of us who lived through the late 1990s [tech] bubble have heard it all before and roll our eyes skyward.”