The Pulse #88: are we at peak AI hype?
Several signs are pointing that we’ve hit the peak of this AI hype cycle: that things could cool down soon enough. Also: the sudden license change at Redis; HashiCorp looking for a buyer, and more.
The Pulse is a series covering insights, patterns, and trends within Big Tech and startups. Notice an interesting event or trend? Send me a message.
Today, we cover:
Industry pulse. A global software hack stopped in an improbable way; security company Rubrik prepares to go public; Mark Zuckerberg personally convincing AI engineers to join Meta, and more.
Peak AI hype? There are several signs pointing that we have hit the peak of the AI hype – and perhaps already passed it by a little. Companies spending 10x on GPUs than revenue generated, AI startups unable to raise the next round of funding, and irrationally high valuations for AI startups whose technology is about to be commoditized.
Commercial open source companies in trouble? Redis Labs changed the formerly permissive open source Redis license to a restrictive one, with the goal to have cloud providers pay when they host Redis. As a response, cloud providers started the Valkey project, which could become the “new and still permissive Redis.” HashiCorp is facing similar challenges with Terraform / OpenTofu. We could be seeing the end of billion-dollar companies built on permissive open source licenses.
Section 174: still hurting US software companies. The US remains the most hostile country in the world to start a software business: because developer salaries cannot be deducted as an expense. The US Senate has a bill that would fix this: but this bill shows no signs of being passed. The US is likely to see fewer software engineers hired until these Section 174 changes remain in place.