Predictions for 2024

Dredge boat in Breck

Happy New Year to you all and welcome to the year of peak? generative AI. If you thought that was 2023, think again. Inspired by Dave Kellog, who every year posts his predictions (I encourage you to read and follow) I thought I would have a go. In no particular order:

AR/VR/Metaverse will continue to underwhelm, For now

This year will see the release of Apple Vision Pro. At a high price, this tool will not move much volume, but it will wow those who try it. The challenge is content: who and why will we invest in 3D content for a device with a very limited user base?

The Apple strategy is to drive content creation through their existing devices, with 3D video recording enabled on the latest iPhone 15 pros, AR embedded in much of their existing phones and tablets and free software for creating models.  

Yet, we haven’t seen the killer app yet. Sure, there’s some gaming on Oculus, and some niche industry applications but until the hardware is cheaper and lighter I don’t think this will move the needle.

Microsoft will release a Data Marketplace

Microsoft have had many bites at the analytics space over the years with confusing and overlapping services like SSIS, Data Factory, SSAS, Synapse, PowerBI, Purview, Azure Data Catalog, Excel. Highly confusing compared to Snowflake or Databricks and you ran a real risk of choosing the wrong technology and being on an evolutionary dead end.

The release of Fabric as a unified marketing message and (in theory) set of compatible services shows they are not ignoring the competition. What’s missing, so far, is a data marketplace that works for companies data providers: they want their data to be easy to consume and don’t want to be charged for customer compute over it.  Maybe this year Microsoft will make that happen.

The market will figure out what Gen/AI is good for

Back in ‘09 when the iPhone SDK came out, everyone went mad for mobile apps. If you had a website, you had to have a mobile app and the board wanted to know when it would be released. Over time, most of those apps died out, to be replaced by apps that could only exist because of the mobile form factor and connectivity. Think Lyft and Venmo.

We’re at the same stage with Gen/AI. We know it’s there, we’re exploring it, adding it to our existing products but no killer app yet. Later this year, someone will really figure it out and we’ll look back and wonder how we existed without it.

Twitter/X will flame out

Elon has done lots of smart things but buying Twitter doesn’t seem like one of them. The strategy is to make it the ’everything platform’ but that requires audience, and audience is quickly jumping ship measured by App Store downloads.

Reversing the wrong end of network effect is really hard and I don’t see Elon wanting to put the time or the money into it when he’s about to launch Starship and faces increasing EV competition from Chinese manufacturers. At what point do you just pull the plug?

Tension between making text available for free for SEO and desire for it not to be included in LLMs continues to grow. Both Google and OpenAI published instructions to block training (while retaining SEO), implicitly agreeing that publishers see a difference between the two use cases. 

Content owners & publishers went to court, most recently the New York Times. The core question before the courts will be: “is LLM training fair use?”. My guess is at least one of the courts will say no. That creates licensing opportunities for companies that own lots of copyright text and, I suspect, we’ll end up with some sort of monetization model just like we have for traffic coming from SEO.

Office CoPilot will be < $30/user/month by the end of the year

Microsoft 365 E5 licensing (the one that all big enterprises buy) is $57/user/month. To that Microsoft wants enterprises to add $30/user/month for CoPilot - it’s GenAI feature set for Office. The argument is that staff productivity will be so much greater that it’s worth it. But both customers and Microsoft are going to struggle to quantify that and a >50% increase in licensing is a tough pill to swallow.

My guess, enterprises will trial, leave it on for a few users but off for most as the cost can’t be justified. Small margin insensitive companies (think hedge funds, asset managers) will go all in but that’s not where the volume is. Microsoft will respond late this year or early next by bumping E5 to $77/month and including CoPilot.

Swing for the Fences: Apple buys Lucid

Apple has been playing with cars for some time and yet, CarPlay aside, hasn’t brought anything to market. Lucid has some fine technology, a sedan that few people are buying, an SUV that’s not coming until 2025 and aggressive competition from Chinese EV manufacturers at price points Lucid cannot meet. Their stock price is way down. They sell direct to customers through their own facilities with their own financing. Further, EV technology, especially battery and sensor, is rapidly changing meaning the half life of EVs is short compared to ICE cars, yet some of this can be fixed over the air. All, just like iPhones. 

If there’s a company that knows how to direct sell premium product to the masses, it’s Apple. 

That’s my predictions. What do you predict?